Tag Archives: london office space

Why Business Owners Should Find New Office Space During the Recession

30 Nov

Conventional wisdom would have it that the midst of a recession is a time for business owners to run and hide. Batten down the hatches, reduce all risky moves and wait out the economic storm in the hope that they can raise the sails once the worst has passed. A recession is no time to expose a business to risk.

In most cases this holds true. The current global recession has put everyone on the defensive, and most business owners have responded with caution. Nobody dares take risks; one wrong move could sink a business.

However, that isn’t the whole story. In fact, the depths of the recession can present businesses willing to take measured risks with great opportunities for short term benefits and long term growth.

¬†Moving in a Renter’s Market

The leasing of office space makes up the lion’s share of the overhead for most companies, and this is especially true in cities such as London and the business centers of mainland Europe. Even after several years of recession and glacial growth the property markets in Europe’s business centers are still expensive, but there are opportunities there for those who can find them.

Right now it’s a renter’s market. Most businesses are loathe to move to new office space; they don’t want to lay down even a penny of capital, and they certainly don’t want to make any long term commitments with the uncertainty of the coming months and years. As a result the rental market has become relatively stagnant. Few new leases are being signed, and landlords are surviving on the revenue from their existing tenants.

Taking Advantage Of the Downturn

As a result of this stagnation it’s possible to secure excellent terms on prime office space. Those businesses willing to risk a move can find leases with relative ease that offer rent free months, flexible lease conditions and even the occasional incentive such as free parking, bundled utilities or cut priced janatorial services. Some lessors may even offer a rental rebate up front to cover the cost of modifications to your specifications. Landlords are desperate to lease their space, and the power is very much with renters.

The greatest perk here is the free rent that may be offered to lure in new tenants. Depending on the length of the lease, several months free rent as a ‘moving in’ bonus could reduce your effective rent considerably – perhaps even allowing you to occupy larger premises at a lower cost (over the life of the lease) than you currently pay. For example, when UBS Financial Services recently leased new premises in Manhattan’s Park Avenue their ten year, eight month lease came with nine months of free rent and an allowance for work on the property, reducing their effective rent from $75 to $56.99 per square foot.

Cutting Costs to Survive the Recession

While moving into larger premises may be appealing, perhaps a more sensible option would be to trim overhead by transplanting to a smaller space. If your current lease allows you to move it may be worthwhile to work out exactly what space you need to function right now, and how much you’ll need to account for modest growth over the next few years.

If you’re currently leasing London office space in the heart of The City you may be surprised at just how much you could save with an incentivized move to smaller premises nearby.

Why You Should Act Now

While the market can be cruel and unforgiving it’s a fact that it often rewards risk takers. Right now the opportunities for those looking for new office space are attractive, but as the economy grows – no matter how sluggishly – the demand for office space will once again increase and the incentives will begin to vanish.

Those business owners willing to take a chance will find leasing terms more attractive than any they are likely to see in the future, but those who decide to ride out the recession in their current premises may find a resurgent market tipping back towards landlords when the time comes to move.
If your business is secure enough to survive the turmoil of a change in premises this may be the right time to consider a move. The risks may be considerable, but the advantages for a business making the right move at the right time may outweigh them.

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5 Tips for Choosing the Perfect Start-Up Office Space in London

30 Aug

In this languishing economy, at a time when start-ups struggle more than ever to find their footing and go on to success, it has never been more important to sweat the details before hanging your shingle. Every aspect of your new business must be perfect in order to give your venture a fighting chance of survival, and there are few more important considerations than the location of your office.

London, naturally, is a coveted location for any new business. As one of the world’s most vibrant, important and well-connected business centres it’s the perfect place to establish a base. However, setting up shop in London can also be a risky move without proper planning. The often extreme costs and inconveniences of establishing an office in the city could potentially outweigh the benefits, so it’s vital to consider the realities before taking the plunge.

To help you on your way to success we’ve come up with five simple tips to help you find the perfect office space London has to offer…

1. W11 or SE21?

As you’d expect, London office space was not created equal. While a Notting Hill location wouldn’t leave you much change from ¬£1.5 million if you were to buy outright, a property in a less desirable neighbourhood could save you hundreds of thousands. This is your first (and perhaps most important) consideration, and the frustrating catch-22 that all businesses face. The best and most convenient office space will always be the most expensive, and you’ll need to carefully weigh up the costs and benefits of any location you consider.

The key consideration here is this: does your start-up rely on passing traffic? Do you need a convenient location for customers and clients to visit? If not, it makes little sense to pay a premium for expensive real estate when you might get much, much more for your money in a location on the city fringes.

2. Transport Links

It isn’t just your customers who need to find your office. You also have to consider the convenience of access for yourself, your employees and your suppliers. London is well connected by public transport, road links and airports but the city centre itself can be a challenge to traverse, and especially so during the seemingly endless rush hour.

As such, your office should be conveniently located to take advantage of public transport links such as the Underground. A location within easy walking distance of a station will cost extra, but in the long run it will almost always pay dividends.

In fact, it may even make sense to locate on the fringes of the city to avoid the problems of London congestion altogether. Office space in the London periphery benefits from its proximity to the city, but avoids many of the problems associated with a large metropolis.

3. Size Matters

With rental prices per square foot higher than most other cities on earth it can be tempting to cut corners when leasing office space in London. However, when inadequate space leads to problems with running your new business effectively it can quickly become clear that skimping on space is a false economy.

Before leasing a property you need to consider your needs carefully, both for the present and the future. Think about your storage needs; the comfort of your employees; parking facilities; local shops and services, and your possible expansion in the years to come. Your new office should satisfy all of your needs and allow for the growth you’ll need to achieve in order to thrive.

4. Be Prepared

Something that often trips up start-ups on day one is the difficulty they find in securing any office space at all, no matter how poor the location or overpriced the premises. Landlords know that start-ups are prone to failure and early cash flow problems, and they almost always prefer to lease their premises to established companies with a proven track record.

To avoid disappointment you should give yourself plenty of time to prepare for the financial hardships of the early days. Landlords may demand a much larger deposit, a longer lease and more onerous penalties for breaking it than they would an established company, and the only way to tackle that problem is to make sure the cash is available to lay down straight away.

5. Shop Around

Finally (and this should go without saying), when searching for office space in London it’s vital to consider as many properties as possible. Never accept the first option, and don’t be afraid to think outside the box during your search. Work with estate agents, of course, but also speak to business partners and friends. Walk the streets and ask questions. With a little luck you may find a hidden gem in just the right location at just the right price.

Like most things in life, it just takes a little hard work.