How much is our industry worth? That’s a million dollar question that every business centre operator, broker, investor and supplier around the world would love to know.
But let’s talk GBP for now.
In the UK, the market’s real financial value has finally been revealed – and there are some quite stunning numbers involved.
The BCA (Business Centre Association) commissioned an in-depth report into the UK flexible workspace industry, and a tantalising glimpse into the honey pot was offered during a launch event on 22nd November. The event took place at Avanta Serviced Office Group’s business centre in The City, at 23 Austin Friars.
A snapshot into the report, entitled The UK Business Centre Market, compiled for the BCA by IPD and Snapdragon Consulting, revealed the following:
- the UK business centre market is home to around 80,000 businesses;
- those firms employ over 400,000 people and generate a whopping £2 billion of income for UK Plc;
- the UK sector occupies almost 70 million square feet of commercial space.
The research shows that the UK serviced office sector alone is a multi-billion pound industry, which is even more impressive given that it represents around one third of the global industry.
It’s this strength that no doubt played a vital part in enabling many workspace operators to withstand less favourable economic times. Indeed, the report found that 43% of centres sampled, currently operating today, opened between 2005-2009. A further 21% opened between 2010-2013.
These are impressive statistics – so what is it that keeps driving demand for serviced office space?
As any operator knows, whether they’ve been in the business for 30 years or just a couple of months, much of the sector’s strength is rooted in its agility and efficient centre management. As the report states:
“The strength of the market lies in the ability of operators to manage properties and customers effectively, creating an environment which is based on flexibility, community and simplicity. This drives demand, boosts supply and supports the exceptionally strong letting activity which is demonstrated by the sector.”
Indeed, that sense of community is an ingredient that has become highly sought-after in today’s fast-moving digital world. The UK is experiencing record numbers of startups, and new businesses are flourishing with low-cost access to community-rich supportive business hubs across the world.
As the report finds, the growth of the sector is made possible thanks to its flexibility, and in providing workspaces “which can reflect the personality of the business occupying it rather than that of the landlord”.
And it’s not all about startups and SMEs. Large corporates are increasingly seeking serviced office agreements for project and overflow space, while smaller businesses are growing within business centres and using the environment as a long-term solution.
For those firms that choose the short-term route, that ‘churn’ is another feather in the sector’s cap – but only if managed effectively by operators and their staff.
The report states: “By operating at between 80% and 90% of theoretical capacity, business centres can accommodate customers’ short term needs for more or less space and in so doing, ensure that the dynamic nature of new and growing companies and entrepreneurs is supported.”
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The UK market is one that has been around for more than 30 years – some would argue its roots go back even further. It has not just survived a crushing global recession, but thrived – and succeeded the crisis much stronger and wiser, leaving experienced operators with a proven business model and the knowledge that they can adapt to market conditions – even when at their very worst.
What does the future hold? That’s another million dollar question. But we can be sure that, based on the BCA’s findings and at the rate the business centre industry is growing, the answer will be upwards of £2 billion.Share this article