Small Businesses Are Left Behind Amidst London’s Flexible Workplace Revolution
Despite the proliferation of co-working spaces in London, the market has yet to hit the sweet spot for some small firms, according to new research commissioned by Evan Randall Investors and undertaken by the ESCP Europe Business School.
The survey finds there is demand for an alternative to serviced offices or co-working spaces. Small businesses are seeking greater privacy and ownership over their workspace, but with flexibility on lease terms as well as shared services and amenities.
Evans Randall Investors CEO Kent Gardner said there may be an opportunity for office developers and landlords to tailor their offer to small businesses that are outgrowing their serviced office provision or co-working spaces, but are not yet ready to move into the mainstream office market.
“It seems the revolution in flexible workspace has some way to run yet and there is demand for an alternative office space offer,” he said.
The survey also found that 22% of respondents were not satisfied with their serviced office, and 17% were not satisfied with their co-working space. The complaints associated with co-working ranged from the lack of warehousing services to no personalized reception and simply not enough office space.
Forty percent of companies are willing to move offices. The main drivers in choosing an office location are cost and transport connectivity, followed by lease terms, the quality of the office and its surroundings.
Gardner was surprised to discover the data indicated small and midsize enterprises have little interest in clustering with similar companies.
“It is certainly an area for deeper research,” Gardner said. “There’s no question that occupiers are increasingly footloose and the desire to work in close proximity to similar businesses is waning — London’s traditional clusters are breaking down and businesses are increasingly happy to move to new locations if the connectivity is good and the office is aligned with their needs and brand identity.”
Small businesses want a high degree of flexibility. According to the survey, 43% of respondents wanted lease terms of less than one year, and 25% favour two- or three-year leases. Gardner said half of companies prefer a single payment covering the rent and services and utilities, for greater convenience, instead of multiple bills.
Over two-thirds (69%) of small businesses would prefer to outsource their basic office services, such as security, cleaning and catering; a third would like additional services to be available, such as 24-hour access, recreation areas and multimedia provision. Two-thirds prefer a shared reception, while 61% favour shared conference facilities and 62% are happy to share kitchens.