Serviced-office outfits open new space amid financial turmoil

March 28, 2008

The growing specter of recession in the US may have caused developers and investors in the UK to abandon their expansion plans, but it has had the opposite effect on serviced office providers.

Instead, they are trawling for office space in the City of London and Canary Wharf in anticipation that the US banks and other financial services occupiers will shed jobs over the next six months and need short-term accommodation until the downturn subsides.

In April, Abbey Business Centres is due to open 28,000 sq ft of serviced offices on floor 37 of One Canada Square at Canary Wharf. This is in addition to 28,000 sq ft it has at the Swiss Re Tower at 30 St Mary Axe.

It has followed the example of MWB Business Exchange, which has opened 34,322 sq ft at 55 Old Broad Street and 18,500 sq ft at City Tower.

Regus has also confirmed it has been approached by financial services occupiers in the City that want to trim surplus office space in the months ahead.

Take advantage

For small and medium-sized firms, the growth in this sector since the credit crunch means there now is a wider choice of serviced office space to occupy than ever before.

‘There are a lot of serviced-office providers who are positioning themselves to try to take advantage of what has been happening in the US over the last few months,’ says Julie Calder, managing director of Abbey Business Centres, which now has 13 centres across the UK and 4,000 workstations.

Financial occupiers are driving this demand because they want more flexible space amid financial uncertainty.

PricewaterhouseCoopers, the accountant, says it expects to be targeting short-term office accommodation over the next year. It is moving 6,000 staff to More London in 2010 for its main operation, but says that serviced-office accommodation is rising up the agenda to accommodate its subsidiary offices.

Paul Harrington, PWC’s real estate director, says that serviced-office providers have begun to tailor their services towards traditional corporate occupiers, who until now have only ever considered long-term leases.

But since the beginning of the credit crunch in August, many of those occupiers have had to reconsider their position.

‘There is a real opportunity here for those serviced-office providers who can prove to corporate occupiers that they can provide as good accommodation as some of the smaller landlords out there,’ says Harrington.

‘They could even start to challenge some of these landlords if they play their cards right.’
Harrington says that, for the last year, PWC has been leaning towards the use of serviced offices for many of its subsidiary businesses.

‘Quite often it is better to go for a two- or three-year lease while you test the water to see whether a certain enterprise is going to work. Then, when you have built up that base, you may later look to a more long-term arrangement.’

And it is this flexibility that makes serviced offices appealing to SME’s too. Committing to conventional space can be too big a financial burden.

Eye of the storm

Peter Cookson, managing director of corporate outsourcing at Regus, says there are striking similarities between now and the internet crash in 2001.

During that period, technology companies that had taken space, particularly in Thames Valley, were hit hard. This time, it is the financial services sector that is in the eye of the storm, but Regus expects the impact to be the same.

‘In 2001, you had all these technology companies who suddenly had a lot of space on their hands that they didn’t need,’ says Cookson.

‘What we did then and what we are doing now is talking to these companies to see if we can let their space to our clients. It is fair to say we have been getting a lot of enquiries from corporate occupiers who need to scale back their space in the City.’

For SME’s looking for a prestigious address in the City, the fallout from the credit crunch means now is a good time to get hunting.

By Mark Shepard, Property Week, 14.03.08

Written by Vyoma · Filed Under Industry News

Emerging markets help Regus to post record profits

March 28, 2008

Serviced office provider Regus is aiming to take advantage of the downturn in the financial and property markets after posting record annual profits.

In a confident statement on the back of its 2007 results, Regus said that take-up and profits had not been hit by the credit crunch, and had, in fact, improved as the year wore on.
Chief executive, Mark Dixon, said he expected the downturn in the property market to reduce rents in the UK over the next 18 months, which would enable Regus to step up expansion by signing more leases.

‘We have been cautious about growing in the UK, especially in London,’ he said. ‘We think rents in the West End especially could come down over the next 18 months and we will have the opportunity to add more stock in London.’

In 2007 Regus achieved a 54% rise in pretax profits to £120m. Revenue rose 27% to £862m. Excluding the impact of new centres, revenue growth was 7% and profit growth was 21%. This was driven by an increase in average occupancy rates from 81.8% to 82.7%. The full-year dividend was raised by two-thirds to 1p a share.

The number of available workstations rose by 24% to 133,000, as it opened a further 146 centres, and revenue per available workstation increased 2.3% to £6,487.

Emerging markets were the driver of growth, as revenue increased by 40% to £113.9m. The company opened its largest centre, in Shanghai, which has 1,400 workstations, and it is set to open in Malta and Mauritius.

‘We’ll see growth throughout the business, but weighted towards emerging markets, especially in Africa,’ said Dixon.

‘Multinational companies are increasingly operating there because of the natural resources located there, and the fact that there is now, relatively, more political stability. It’s the last true emerging market.’

Dixon claimed Regus was well placed to withstand the effects of the credit crunch: ‘Quarter four saw a steady improvement and continued increase in margins, and the second half ended better than it began, even in America’.

‘Customers don’t want to enter into fixed arrangements, and they don’t want to put down capital, so they appreciate the lower costs of flexible space,’ he added.

In the UK, Dixon said he would not be replacing chief executive Nick Wood, who left in November. Dixon took over as UK chief, but has now stepped back.

Mike Phillips, Property Week, 20.03.08

Written by Vyoma · Filed Under Industry News, SOS News

Going green over Easter – do your bit for the environment!

March 20, 2008

This Easter thousands of British businesses are planning no energy savings what so ever, with even the basic things in life, for example turning the lights off will be ignored by many companies. Energy will be wasted by leaving the heating on in the offices and also leaving electrical devices on, for example the printers will be left on all four days, despite the office being closed.

A recent survey that was carried out on 500 UK office workers were asked what kind of energy saving procedures would they follow or put in place over the Easter period to reduce their carbon foot print, many people replied that they do not think them or their company would be putting any energy saving factors in place, like turning off the lights or switching off their printers.

Almost 89 percent of business do not or have never turned off electrical devices in the office, and almost two thirds of all businesses are planning to leave the heating on despite the office being closed on this long weekend break.

Richard Smith, Managing Director, Search Office Space, says:

‘’I am very surprised that so many businesses do not even plan to do a very simple thing that could save a huge amount of energy to the environment. I do not think that it is necessary to heat up buildings or leave on printers and phone chargers when you know that you are not going to be in the office for the next four days. It all sums up to the fact that many businesses have forgotten the simplest ways of energy savings and how to reduce their carbon footprint.’’

A recent report by the Carbon Energy Trust found that many organisations are not very energy efficient at all, even though they may believe that they are doing their bit for the environment, they are in fact not even saving half the energy they should be.

Written by Vyoma · Filed Under Featured Stories, SOS News

Property group may switch cities

March 19, 2008

A STOCK-MARKET quoted company is understood to be planning to relocate its head office to Liverpool. Property specialist Your Space wants to relocate from Manchester in what would be a major public relations coup for the city.

In recent years Liverpool has lost most of its companies quoted on the London markets and city leaders have been keen to see the trend reversed.

Your Space is listed on the Alternative Investment Market and is currently valued at around £20m. It specialises in renovating listed buildings and converting them into hi-tech modern serviced office accommodation. The company last year opened Il Palazzo in Water Street, a former banking hall that has been refurbished in a £1.6m investment. The building now offers a package that includes a concierge, free telephone calls and broadband and all bills met.

Director Steve Turton said: “We became operational last August and expect the 15,000 sq ft to be fully let by next month. “We have a unique business model converting buildings of character into five star commercial accommodations. The combination of acquiring this building and coming to Liverpool was too good to miss.” He said he was unable to comment on whether a relocation was imminent but added: “Liverpool is a great place to do business at the moment and this is a great flagship building.”

Your Space has eight centres across the country including London, Manchester and Glasgow. However it also has an aggressive expansion programme in the pipeline and plans to open another 30 centres over the next three years. If Il Palazzo proves successful, the company will look for a second building in the city centre to convert.

Mr. Turton added: “Serviced offices are a fast-growing market and we are in a good position to help meet those sorts of needs.”

Written by Barry Turnbull, Liverpool Daily Post

Written by Vyoma · Filed Under Industry News, SOS News

Victim of its own success, Edinburgh City Centre now in Lack of Office Space

March 17, 2008

The amount of vacant space in Edinburgh has slipped to a very low level for the first time in many years. Recent reports from agents and surveyors suggest that Edinburgh would struggle immensely to attract a positive investment if office space / commercial property were not made available for companies who are looking to relocate, new start ups or for those who are already settled there and are looking to upsize their business.

Currently there is about 300,000 square feet of conventional space available in the city; the office availability has decreased to a rate of nearly 4 percent from this time last year. There are very little new developments or any high quality office premises in the city, many new developments for commercial property are expected to be completed by the end of year though saying this city needs to be quick on responding to such issues again in the future.

With the pressure of building costs, rental growth in Edinburgh cannot be avoided. If the city wants to see an increase of commercial space on the market then with out doubt they must accommodate this. With out any new space coming in, Edinburgh will only have less space to attract new investors and businesses to the market and this could risk losing a whopping £800 million in this sector.

Until new developments of commercial space have been built in Edinburgh, businesses can find as another alternative to go for serviced offices. Managed and flexible space may be a great solution for businesses; it allows them to have more flexibility on rental terms than the ones for conventional office space which require extra costs such as IT Infrastructure, rates…

Flexibility is a very important advantage to businesses, especially when a business is expanding or down-sizing in a city like Edinburgh where conventional office space availability is very low.

SOS > Search Office Space is the leading serviced office space provider in the UK. We list all centres and can help you with your office search by offering you a shortlist of serviced offices in the area where you are looking, but also give you impartial advice and arrange viewings on your behalf.

If you are looking for a serviced office in Edinburgh or any other location, whether it is nationally or internationally, SOS > Search Office Space will help you with your search. Call us on 0800 740 8080 or alternatively email your office space requirement to sales@sosplc.com

Written by Vyoma · Filed Under SOS News

Downsizing on Office Space in the US

March 17, 2008

There are many factors these days to consider when looking for an Executive Space/ Fully furnished office space.

The total cost of your office space will generally be at least 1/5th of your total budget set aside for your business; this cost will usually be the largest chunk of the companies’ cost after salaries. It is imperative to make the right decision about which office option to choose from as it will have a great impact of the profitability on the business.

With the current crisis in the USA, the net absorption of office space had slipped away rapidly. Many landlords have found that tenants have been downsizing space as current economic trends are showing negative signs in the sector and many business centre operators have started to sub lease developments. Previous reports have shown that with an increase of landlords subleasing properties the number of unemployment has also increased with the amount that centres are subleasing has gone up more than 2 million square feet since the start of the year; this is the largest quarterly increase in six years.

With Executives suite there is always the opportunity for you to upsize space or downsize space if need to. Executive suites are often licensed than leased. The alliance is a simpler form of agreement than a lease and unlike traditional leases you will not have to pay the landlords legal costs. Executive office accommodation generally allows you to move in and out quickly and it is ideal for organisations that need flexibility. Taking Executive suite only allows you to use the office space that you need.

Business Centre Operators will only charge you extra for the use of meeting rooms/ boardrooms, which is on a pay as you basis. Communal areas such as reception / waiting areas, kitchens and washrooms are usually included in the package.

This type of office space allows businesses to increase or decrease the size of their offices without having to change the business address or having to operate from two different sites. This is why in an economic situation where companies currently are, Executive suites seems to be the most secure option to go for as well as the most cost effective.

Flexibility is a very important advantage to businesses, especially when a business is expanding or down-sizing. Executive suites are evolving at the same rhythm as the business is growing

SOS America is the leading Executive Suite search facility in North America. We are listing all the centres and can help you with your office search by offering you a shortlist of Executive offices in the area where you are looking, but also give you impartial advice and arrange viewings on your behalf.

SOS America’s services are completely free of charge, if you require an executive office, call us today on 888.989.0006 or alternatively you can email your requirement to sales@sos-america.com

Written by Vyoma · Filed Under Featured Stories, SOS News

Living and Working in Atlanta, Georgia

March 12, 2008

Atlanta is the capitol of Georgia and is one of the most populous cities around. Atlanta is one of the fastest growing cities in the world and recently went through a transition from being a city of regional commerce to a city of international influence.

Atlanta’s skyline has a mixture of high rise and mid rise buildings of both modern and post-modern landmarks. The city’s buildings are clustered together in three districts, which include Downtown, Midtown and Buckhead. The central business district and Buckhead have many big firms and businesses residing there, with it being the main district where the Atlantans go to work.

Atlanta is home to some of the county’s largest and most famous companies, including Coca-Cola (founded there in 1892), United Parcel Service, Georgia-Pacific Corporation, Turner Broadcasting System and Delta Air Lines. Major industries include service, communications, retails, finances, insurance, conventions and manufacturing. Government, healthcare and education are also major employers.

SOS – Search Office Space have a huge presence in Atlanta, representing many serviced offices / executive suites in and around the area.

Search Office Space is a worldwide Free and Impartial Serviced Office / Executive Suites provider, established 1993. We undertake research on your behalf, collating the information you need, we filter the information to include all available office space that meets your requirements. We list all locations, price ranges and sizes worldwide.

Peachtree Street is one of the cities most famous walks and places to work at. Being a convenient location to work, the street is also a shopping destination envisioned to rival Beverly Hills’ Rodeo Drive in Los Angeles.

Living in Atlanta is sure to make you feel like royalty. Gracious and inviting, the city of Atlanta offers you a traditional elegance with a modern twist to it. With a variety of stylish neighborhoods, world-class culture and a wealth of recreational and social opportunities, the city of Atlanta is an ideal place to work, play and raise a family!

Atlanta’s overall cost of living is 15% above the national average, with the median price for apartments at $760 per month. Average apartment rentals cost $930 with utilities at $90, putting it on par with apartments for rent in cities like Philadelphia and Los Angeles. The best part of looking for apartments in Atlanta is the huge variety available. There are more than 1,500 apartment complexes in the city, so you’ll find everything from historic buildings to modern high-rise luxury apartment rentals.

Residents of Atlanta enjoy four distinct seasons with generally mild temperatures throughout the year (the average daily temperature in January is only 41 degrees, while in July it’s a whopping 79). But thanks to the humidity in summer months, the city has earned the not-always-complimentary nickname “Hotlanta.” Fortunately, the heat of summer and cold of winter are short, and the gentle spring and autumn seasons are long and pleasant, getting people out of their apartment rentals in droves to enjoy outdoor activities. If you’re into sports, Atlanta’s a great place to live. Take in an Atlanta Braves baseball team at Turner Field, or check out the Falcons football team at Georgia Dome or the Atlanta Hawks at Philips Arena. For non-sports entertainment, visit Underground Atlanta, a cool subterranean marketplace where locals go for shopping, eating and socializing.

Atlanta is the cultural and economic centre of the Southeast. This family friendly urban oasis has kept its Southern charm, whilst attracting newcomers from all over the world, with a moderate cost of living and housing options to fit every lifestyle. A world of opportunity awaits you – come and see for yourself what makes Atlanta great.

Require office space in and around Atlanta? Call us today on 888.989.0006 or email your requirement to sales@sos-america.com

Written by Vyoma · Filed Under Featured Stories, SOS News

The Downturn on the UK Commercial Property Market

March 10, 2008

Predictions of a fall in UK property prices generally focus on the residential market but more recently there is news that gives warning of difficult times ahead for the commercial market.

Reports suggest that the UK commercial property market may ‘bottom out’ from the middle of 2008 and many analysts are forecasting that UK shops, office space providers and warehouses will lose nearly 25% of their value between June 2007 and the end of year 2008. Already, the values of some out-of-town retail developments have deceased by up to 20% and the trend is expected to continue if consumer spending weakens and slows rental growth.

The commercial property industry began to fall in July 2007 as the rising cost of debt forced a number of private buyers out of the market. Deals were ground to a halt some time in September as the crisis in the credit crunch had forced sellers to pull deals. Saying this office space providers were the best selling and performing sector in January, after having been the worst in the previous two months as the downward momentum in Central London offices eased.

Three months ago the Investment Property Forum had predicted that there would be a 0.9% increase in the commercial and property market, saying this the total predicted so far today has now fallen to 2.6% this is set to fall by the end of the year 2008. Since the IPF launched the forecast in 1999, this is the first time since that there has been such a huge down fall.

The commercial property sector had been on a long term roll until recently when prices had risen by almost half. As a result of the slow growth in the commercial property markets, many businesses and firms have found that buying new properties has proved to be very difficult for them to purchase. As the demand for commercial property at this moment in time is at a moderate stage, purchasing a property is still just too expensive, especially for smaller firms that have to borrow money from banks. In this case larger firms are being able to purchase more developments as they have much more assets and can still afford to buy new developments despite the affects of the credit crunch. Larger businesses, which are well established in this industry, hold a lot of properties to their name and they can afford to purchase new properties under their belt, which means in turn an increase to their portfolios.

The commercial and property industry could rapidly be affected by this downfall; predicting that agents and brokers may lose up to 7.8% of its capital by the end of the year, also the prediction that rental growth is also expected to fall by at least 1.1% this year.

Written by Vyoma · Filed Under Featured Stories, SOS News

Bank of England Maintains Bank Rate at 5.25%

March 7, 2008

The Bank of England’s Committee yesterday voted to maintain the official Bank Rate to 5.25%. The committee who attended the monthly meeting, which was held yesterday, came to the conclusion that increasing food and energy prices was to be blamed for this.

Another reason for the Bank of England to come to this decision is the credit crunch crisis which started in the US when the Federal Reserve cut interest rates to 3% for the second time in nine days to prevent the US economy from going into turmoil. The Federal Reserve is hoping that this move will be of a good nature and will cushion the US economy from the worst effects of the credit crunch still to come.

After the effects of the credit crunch in the US, the toll has now spread over the Atlantic and has caused havoc in the UK and Europe too. Reports have found that consumers are spending less which is leading to a down fall in the economy leaving many businesses bankrupt or merely in a position where they cannot afford to pay their rents. The significant inflation risks and the slowing growth of the economy are at risk here. Where there has been a drop in the US market, the UK economy is just as bad with both countries facing turmoil should they not tread cautiously.

Nearly £175 billion has been lent to businesses in the commercial property market - UK; many analysts believe that the recent effects of the credit crunch will have no effect on the commercial property market and that many firms will just continue to buy new properties to add to their portfolios. While many other analysts believe that the office, retail and warehouse industry has cooled rapidly and they fear this could turn into a slump. They believe that this industry is coming to a juddering halt and that Britain is facing a commercial property crash which has not been seen since in the early 1990’s.

On the other side of the Atlantic in the US, the commercial property market is still an on going crisis in the global finance market. Economists in the US say tighter credit and the substantial reductions in new constructions is causing havoc with the unemployment sector across the state. The effects of the bailout on the commercial and real estate markets has slashed property values rapidly and as the impact of sales and income tax causes a threat in the economy, the whole nation seems to be going into recession.

Both the UK and the US have been hit severely by the credit crunch and it seems that both countries are having to pay the price for it.

Written by Vyoma · Filed Under Industry News, SOS News

The Life and Economy of Toronto

March 5, 2008

Toronto is a major international centre for business and finance. Toronto is generally considered the financial capital of Canada and has a high concentration of banks and brokerage firms on Bay Street; which is a major international centre for business and finance.

SOS – Search Office Space have a huge presence in Toronto, representing many serviced offices / executive suites in and around the area.

Unlike many cities whose economic fortunes are tied to one or two major industries, Toronto has a broad array of successful manufacturing and services clusters. Other international cities strive for the economic diversity that Toronto has already achieved.

Toronto’s population is cosmopolitan and very international. It is one of the world’s most diverse cities; about 49 percent of the population is non Canadian, this is mainly because of the city’s low crime rates, clean environment and generally high standard of living. Toronto is consistently rated as one of the world’s most livable cities. In addition to this Toronto was ranked as the most expensive Canadian city in which to live in 2006.

Toronto has an International and highly diverse nightlife scene. Great shows before they hit Broadway, The Toronto Symphony Orchestra, and Toronto’s comedy clubs make this a must stop and visit destination city Thus with several venues for dance and musical performances with top world wide names performing, the nightlife nightclub scene is at an all time high.

Visitors who like to shop will find Toronto is their kind of city. There are a number of interesting shopping areas which are perfect for outdoor strolling and feature a wide range of locally-crafted, original and antique merchandise. With a wide variety of big box stores, shopping malls and specialty boutiques to choose from, Toronto is sure to satisfy you.

If you’re looking for office space in or around Toronto, call us today on 888.989.0006 or alternatively email your requirement to sales@sos-america.com

Written by Vyoma · Filed Under Featured Stories, SOS News