After WeWork revealed a positive growth in the first quarter of 2019, experts are still concerned about how sustainable the company would be in the face of a recession.
What to expect of Birmingham’s serviced offices
Serviced offices accounted for Birmingham’s largest office deal in 2018. The sector took up about 29% of all office space that year. Going forward, commercial property agency KWB has predicted what to expect from the market this year.
Last year’s largest transaction was Birmingham City University’s acquisition of a 118,240 square foot space at the Belmont Works site in Eastside. The space is apart of the school’s STEAMhouse project and will be turned it into a hub for small businesses, arts organizations and academics.
Malcolm Jones, KWB’s Head of Office Agency, said that some serviced office space will be taken by the Commonwealth of Games, while others will be used by companies associated with HS2, a high-speed railway that is under construction.
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“However, the average length of contract in serviced offices has fallen to just six months, and the average length of stay is now around 21 months,” said Jones. “By looking at the average annual take-up of office suites of 5,000 square feet or under over the past five years, we estimate that only 63,000 square feet in the last two years may have been absorbed by serviced offices. However, this falls far short of the growth in provision for serviced offices, which may indicate high availability of space in some of these buildings.”
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