Clarendon Business Centres has acquired a portfolio of central London serviced offices from Reflex Business Solutions in a deal that highlights the heightened investor interest in the fast-growing sector.
Twenty-fifteen was a big year for the flexible workspace sector; flexible workspaces became more popular, various spaces opened in different countries, and the CMA (Competition and Markets Authority UK) finally recognised the serviced office and flexible workspace industry as a separate industry from other types of office spaces.
This year was also a year where we saw independents thrive. In the US, MetroOffices won Space Innovator Award; in Eastern Europe, Sterling Offices opened a new location in the heart of Sofia; in Australia, one of Ultimate Office Solutions’ locations became Headquarters of Alliance APAC; and in the UK, Clarendon Business Centers expanded it’s portfolio in London by acquiring Reflex Managed Offices and Ventia was bought by South African firm Boutique Workplace Company.
On these last two UK deals, industry finance expert Jonathan Price, from Business Centre Capital Co Ltd, commented that:
“In the 16 years I have been in the industry, you could number the multi-centre M&A deals not involving Regus on the fingers of one hand, until now. The past month has seen two deals in as many weeks. I take this as another sign of the growing maturity of the sector, which is now recognised as an industry in its own right, both by the financial markets and by government.”
(Read more about Clarendon’s acquisition in the Property Week article below)
Without a doubt, 2015 has been a year for the book, as it’s given us a hint of what’s to come and what we can expect from the flexible workspace industry in the near future. As we recently heard from Liz Elam, the coworking wave is about to start it’s full-on forward motion.
Article by Richard Williams published by PropertyWeek.com
The portfolio, which comprises 50,000 sq ft of space and 750 workstations across 16 business centres in London’s West End and Midtown, more than doubles Clarendon’s holdings.
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The deal is the second serviced office provider tie-up to emerge this week, after Boutique Workplace Company, part of the Moorgarth Property Group owned by South African retail magnate Christo Wiese’s Tradehold, confirmed on Monday that it was buying serviced office firm Ventia, creating a business with more than 2,500 workspaces across central London.
Clarendon, which had a portfolio comprising 12 centres in London and the South East prior to this deal, has been targeting the central London market for some time. Last year it acquired an 18,000 sq ft property in Upper Berkeley Street in its first venture into the West End market.
“The Reflex portfolio is a strategic addition to our current operations,” Clarendon’s managing director Julian Cooper said. “It gives us a major foothold in the prime central London market, a market in which we expect to continue to expand and in which we will be seeking more exciting opportunities.”
It also has centres in Oxford, Bromley, Bracknell and Bournemouth as well as three in London.
“We had been discussing our exit strategy for some time and once we had met the Clarendon team we realised our interests were aligned and that this was the right deal at the right time for both parties,” said Robert Schogger, joint managing director of Reflex.
Douglas Green, of specialist serviced office agency Green Kinnear Real Estate, which advised on both deals, added: “The serviced office sector has seen a major increase in activity over 2015. The growing awareness that flexibility is the future of the workplace combined with a dynamic small business economy is a key driver for this growth. The fluidity of the market points to further consolidation to come.