Leading female business figure Niki Fuchs discusses the challenges and opportunities in the serviced workspace market, and why the emphasis must be on ‘service’.
Guest post by Niki Fuchs | Feature image: Giles and Niki Fuchs
Driven by the expertise and determination built on the heritage of the earlier Fuchs’ family office business established several decades ago, Giles and Niki Fuchs, the brother-sister duo launched serviced office group Office Space in Town (OSiT) in 2009.
Since then, the company has become one of the leading providers of serviced offices in the UK.
Below, Niki, Managing Director of OSiT offers a unique perspective into the world of serviced offices; from securing investment, to the challenges of running the day to day business, and vitally, ensuring that the service offering stays distinctive and market leading.
Niki began her career in serviced offices at the age of 21 and barely three years later took over the management of City Executive Centres. Her biggest challenge was finding investors for the business. After meeting a number of potential institutional investors, Niki secured an initial injection of capital from property investor and developer Quintain, which provided the financial backing to expand the business and eventually build a successful serviced office management group, with a network of offices across the country.
OSiT- a new model for serviced offices
In 2009, Niki embarked on a new venture with her brother Giles, launching Office Space in Town. Together, Niki and Giles anticipated the huge growth potential in the serviced workspace market – which has enjoyed strong, near double-digit growth, with London the clear leader, recording near 20% growth rates.
They also decided to adopt a freehold serviced office model, which allows greater investment into the design and facilities of the building, offers a high, yet resilient yield and benefits from strong potential capital gains for the investors they needed to back them. Driven by demand for flexible leases and work space arrangements from both high-growth and larger corporates they soon found that there was great demand for the type of space they could provide.
Successfully securing the backing of global investors
To expand this business, securing the backing of institutional investors was key so that they had the cash to buy buildings.
Global real estate investor, Forum Partners was the first to commit and with its backing OSiT launched its second serviced office joint venture, LSO I, and acquired their first three London-based serviced offices buildings in Liverpool Street, St Pauls and Waterloo.
Two years later, with the launch of the second joint venture LSO II , Niki and Giles acquired one more boutique serviced office in 20 St. Dunstan’s Hill.
Earlier this year, OSiT secured backing from one of China’s leading investment managers Kailong in a deal that values its two commercial property joint ventures at about £160m, giving the business further financial power to expand its portfolio. Kailong took a majority stake in OSIT’s first fund – LSO I – replacing international investment firm Forum Partners and valuing the vehicle at about £90m.
Kailong’s investment in LSO II values the JV at more than £60m. Forum Partners remains a backer of the second vehicle.
Creating an enjoyable and inspiring working ethos
Niki believes that an efficient and effective operational structure is a prerequisite to running a successful business.
To achieve this with OSiT, Niki invested time and resources to build the right ethos and working culture to drive business performance and customer satisfaction.
Niki highlights the importance of investing in training and development of staff, which helps create an enjoyable and highly efficient working environment. At OSiT, employees are well-equipped with skills and knowledge which enhance job satisfaction and help the business to boost productivity. Ultimately, ensuring that an enjoyable and inspiring working culture is in place improves customer service and helps establish and preserve long-term relationships with key stakeholders.
Spearheading developments and changes in the industry
Niki believes that as the serviced office industry continues to grow, providers like OSiT must stay ahead of the curve and differentiate their offering. Businesses are demanding more from the workspaces they occupy and flexible workspace providers are faced with the challenge to offer innovative services, unique designs and high-spec facilities.
OSiT has been a true leader in the space, providing clients with bespoke designs and equipping its services with the latest technological innovations. The designs of OSiT’s buildings range from 1920 Great Gatsby themed decorations to Lewis Carroll inspired Alice in Wonderland spaces.
OSiT’s latest building in Monument is symbolic of the next generation of serviced offices where clients are provided with access to rooftop terrace cafes, bike rooms, beauty treatment rooms, and serviced bedrooms.
The flexible workspace sector remains an attractive new asset class, underpinned by strong growth drivers in both the UK market and globally. Despite ongoing preparations for Britain to exit the European Union, Niki and Giles’ serviced offices continue to experience strong levels of demand and are actively pursuing opportunities to acquire and lease buildings in the Capital to expand their existing portfolio.