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Paul Slinn, Flexioffices: Serviced Offices are the Solution to Brexit Uncertainty

by Allwork.Space - Press
June 21, 2017
in Business
Reading Time: 4 mins read
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London, UK (Unsplash, Pexels)
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Paul Slinn, FlexiofficesPaul Slinn, Founder and Managing Director of UK brokerage service Flexioffices, shares his views on flexible workspace as a solution to the UK’s current political turmoil:

“Since the vote to leave the European Union last year and more recently, the outcome of the General Election, we are seeing companies satisfying their office needs in a serviced or coworking solution rather than signing up for long term leases.

“We have also seen our enquiries bucking the wider office trends with enquiry levels continuing to grow on a month to month basis. We see this trend continuing with underlying growth being driven by a wider trend which has seen companies seeing serviced offices and coworking spaces as their preferred choice.”

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Serviced Offices: The solution businesses need in the midst of Brexit uncertainty?

Guest post by Paul Slinn

  • As predicted, the UK office market is slowing as companies adopt a cautious attitude as Brexit looms.
  • Large companies have expressed reluctance about committing to a future in the UK, with many putting contingency plans in place to move their offices to the continent amidst Brexit uncertainty.
  • Serviced offices has bucked the trend, with demand up 29.79% one year on from the Brexit decision, suggesting that flexibility is key to business success during this period of instability.

What problems do UK businesses face?

The UK’s decision to leave the European Union presented a new set of challenges for businesses and the office market. Short term volatility in the market and uncertainty about how the referendum will affect their organisations have caused many companies to look to their future in the UK with caution and anxiety. After all, it cannot be ignored that a bad trade deal with the EU could have disastrous consequences for the UK economy.

Stricter immigration rules are also likely to have a significant impact on the way that firms are able to hire staff, which is another considerable turn off for companies with business centres in London.

Unsurprisingly, a number of global organisations have expressed concern about the implications of Brexit and suggested relocating in Europe, signalling a huge blow for the UK economy.

HBC, UBS and Microsoft are just a few organisations that have put plans in place to move employees out of the UK due to Brexit. Deutsche Bank has warned that over 4,000 staff could be forced to leave the UK if access to the single market is lost.

American finance giant JPMorgan has also confirmed that they are looking to relocate hundreds of employees out of the UK to Dublin, Frankfurt and Luxembourg.

What effect has this had on the UK office market?

As predicted, the UK office market has seen a fall in demand, with the market slowing as a number of financial firms look to relocate to the continent. Land Securities chief executive Robert Noel said that although the expected fall in demand was indeed happening, it was “less than we expected”, and that Land Securities’ key markets have “paused for breath”.

However, Chris Grigg, chief executive of British Land said “We expect London to continue as a leading global city”, expressing a more positive outlook.

With the UK’s future with the EU still very much in the air, what’s the best solution for businesses who are undecided whether to keep their offices in the UK in the interim?

Are serviced offices the solution?

In contrast to traditional office spaces, demand for serviced offices have soared in the year after the Brexit vote with Flexioffices’ figures showing a 29.79% increase YOY in the number of inquiries from the same time last year.

In the capital, some of the most notable spikes in interest were in East London (+37%) and North West London (+22%).

Key London locations continued to grow in popularity with searches for serviced offices in Kings Cross up by 7%, Westminster up 5%, Hammersmith up 3%, and Kensington & Chelsea up 2% from the previous year.

A number of businesses are shying away from long term investments and commitments to the UK as our relationship with the EU hangs in the balance. Serviced offices provide a convenient, short term and flexible solution for businesses of all sizes, so it’s hardly surprising that there has been a surge in interest in the wake of Brexit.

Serviced office space has become increasingly popular with SMEs as they look to establish a foothold in the market during this turbulent time. With serviced offices, SMEs, who may have been wary about searching for office space in this tumultuous period, can take up excellent office spaces in prime locations, without having to commit to long lease agreements and worry about the long-term effect of Brexit.

Larger companies are also snapping up serviced offices as a stable short-term solution until they decide on their next move when the Brexit, (and election) chaos has calmed and we get a better picture of what kind of Brexit deal the government is aiming for. Other key factors that have drawn larger corporations to shared serviced offices are the collaborative environment they promote, superior facilities and the potential uncover new talent.

The fluctuation in currency has also invited a number of foreign investors to the UK seeking to maximise on sterling weakness since the Brexit vote. Serviced offices offer the perfect short term solution for overseas investors looking to take advantage of Brexit instability in the UK.

The demand for serviced office space and flexible occupancy terms has not gone unnoticed, with British Land recently setting up its own flexible office brand to maximise on its growing popularity.

As UK-based businesses gear up for a bumpy ride, they must be adaptable to changing circumstances, which is exactly what serviced offices enable them to do. In this period of uncertainty, we can be sure of one thing; demand for flexible office space isn’t going anywhere.

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