The Rise and Rise of Co-working: Here to Stay?
Recent research undertaken by Hicks Baker has revealed the extent to which the serviced and co-working offices sector has grown in Reading over the last 18 months, mirroring a UK wide trend that saw the UK serviced office market expand by over 150% in 2017.
Just under 170,000 sq ft. of new serviced and co-working space has been created in Reading in 7 buildings, all of which are in the town centre. The total amount of space in the sector in Greater Reading now exceeds 569,000 sq ft. with the availability of such accommodation now divided almost equally between the town centre and the business parks, bringing back into balance a market sector that was previously heavily skewed towards out-of-town locations.
This growth is being driven by a number of key factors:
- The emergence of different ways of doing business which is being met by new working environments which encourage collaboration between companies.
- The serviced office market is evolving. Established providers are upgrading and, to some extent, reinventing their accommodation to meet these new demands. Regus’s new Spaces concept, which has been rolled out at 9 Greyfriars Road, is one such example.
- Many landlords have taken advantage of Permitted Development Rights to converted tired office buildings which would otherwise have required substantial capital investment to keep them relevant to the modern office occupier. This has undoubtedly created a dearth of good quality smaller spaces for SMEs; the serviced and co-working operators have positioned themselves to fill some of this void.
- Developers of major office development have, in some instances, sought to widen the appeal of their buildings by retro-fitting serviced/co-working space to improve the amenity on offer to tenants. This has happened at R+, The White Building, The Blade and, most recently, at Thames Tower.
Business needs are changing. There are two main factors driving this change which, on the face of it, appear to be slightly contradictory. First is the growth of new start-up businesses which consider themselves to be ‘agile’. They are uncertain how quickly they will grow and frequently operate in business sectors where there is rapid change.
Secondly, in any dynamic market, there is uncertainty but this is being exacerbated by the still unresolved issue of Brexit and the UK’s future relationship with Europe. Modern businesses need to be able to adjust quickly- to be able to expand or downsize as their needs dictate. In an increasingly competitive marketplace with pressure on margins, there is a constant drive for efficiency and no CFO wants to be paying for unwanted or underutilised office space.
In short, an increasingly diverse range of companies is looking for flexibility, efficiency and simplicity. This is no longer the domain of start-ups and small entrepreneurs only. Offices are increasingly viewed as a service, not just as a space. ‘Front of house’ is key to the success of any serviced or co-working facility. Companies will value concierge facilities; the availability of meeting rooms, desk sharing and access to communal break-out areas facilitating interaction with likeminded companies are attractive options.
Choosing the right location is vital so it is no coincidence that the recent explosion in serviced and co-working space in Reading is taking place in and around the station. Transport links such as the new Elizabethan Line (Crossrail) services, an attractive urban environment and easy access to the usual town centre amenities are all important factors. If you are looking to invest in this sector, getting expert advice from a specialist commercial property agent that knows the local area, economy, and the changing dynamics of the office market would be a sound investment.
If you are thinking of investing in office accommodation, or if you’re a new business looking for the best place to locate, give the team at Hicks Baker a call on 01189 596 144.