Coworking, Serviced and Leasehold: A Guide to the Different Office Options
Traditionally, companies looking to set up a business and find office space for their outfit would have sourced a property, leased it from a commercial landlord and fitted the space out themselves. This option still stands and many companies still choose to lease their space.
However, there are a number of other office options available today to fulfil the needs of a variety of companies.
In recent times, the coworking space and the serviced office have come to the fore as further office options for businesses of all sizes. Although the differences between them are simple, those unfamiliar with all the distinctions between the different office options might not recognise which space offers their organisation the best chance of growth and success. We wanted to make clear the definitions and then look at the pros and cons of each.
The Pros and Cons of Leasehold Offices
Control – Those who take on a leasehold contract have more or less free reign over the space. They can have complete autonomy over the design, layout and branding of their space.
Longevity – Signing a long-term lease allows companies to make long-term commitments and decisions based on their location. This longevity is a positive for companies who are confident that their organisation will remain the same size and in the same location for the foreseeable future.
Inflexible – Long-term leases can become problematic if the company ever needs to expand, downsize or relocate. Being stuck to a space is only advantageous if you are sure of your organisations footing for the future, otherwise changes in business will bring about unwarranted complications involving office space and will likely incur unwanted costs.
Unmanaged – The freedom which comes with an unmanaged space brings with it a number of responsibilities and tasks which can soon slow down business. The effort of arranging internet services, phone lines, fitting furniture, fitting amenities and sorting out utilities can be costly and time-consuming. Organising all these variables can be a logistical nightmare, which can bring with it expensive hiccups and will likely take a long time and cost a lot of money; this is all time and money not spent on the actual business.
The Pros and Cons of Serviced Offices
Convenient – With everything already in place, companies can really ‘plug in and play’. Organisations don’t have any of the hassles of arranging furniture, fit out, internet, phones, utilities and amenities; instead, they simply arrive and can get on with the important stuff from day one.
Flexible – Shorter-term, monthly contracts mean that companies have options when they grow or decide to relocate. Companies avoid having to overspend on spaces in the hope of growing into them, which in turns means they avoid taking risks on their office space. Also, serviced office providers will often have larger spaces for them to grow into.
Cost – By paying an all-inclusive cost for the office space you can actually save money by choosing a serviced office. Also, commercial property agents who specialise in serviced offices will often charge nothing to clients looking for serviced offices, as opposed to agents who often charge clients to help them find leasehold space.
Control – It’s unlikely that you will be able to make huge changes in the design, layout and branding of a serviced office, especially in the facilities that are shared such as meeting and conference rooms.
Length of term – Companies looking for much longer terms may struggle. Although longer terms are becoming more available in these offices, it is unlikely that you will be able to obtain an initial contract for more than 24 months. This doesn’t mean you will have to leave after this time, but you will normally have to renegotiate.
The Pros and Cons of Coworking Spaces
Price – This is the cheapest option of the three. The price advantages are clear. Coworking spaces are essentially the cheapest office option available, which is why they are so preferred by freelancers and small startups.
Flexibility – Like serviced offices, these spaces are extremely flexible meaning that organisations and individuals can avoid risk by never committing to a space which could be unsuitable down the line.
Networking – The social and collaborative aspect of coworking has been reported to be great for business. The opportunities for freelancers or small startups to network and grow as a result are abundant. This can also be huge for home-workers who can soon become isolated.
Privacy – For companies or individuals who prioritise the discretion of their clients, the space can often have very little privacy. There are often meeting rooms and private booths for phone calls, but constantly booking them out may soon become unrealistic. The noise and atmosphere, although a positive, may be distracting for some workers.
Branding – In a coworking space you have even less opportunity to design or brand your space.
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