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Serviced Offices - UK - October 2015

Serviced Offices - UK - October 2015

“While London continues to generate the greatest demand for serviced offices, the Midlands and north are key growth areas to watch. Both these regions are benefiting from strong business start-up rates, increased investment, and government policy emphasis. Serviced office providers that are looking to expand will find positive development opportunities in the Midlands and northern regions.”

– Ambreen Ahmad, Research Analyst

This report will explore the following key issues regarding the serviced office industry in the UK:

What are the key factors creating demand for serviced office accommodation?
How have changing economic conditions affected the market?
Which factors are driving the move towards wider and more flexible serviced offices provision?
How are changing labour market trends impacting the serviced office sector?
What does the future of the UK's serviced office sector look like?


EXECUTIVE SUMMARY
The market
Accelerating service sector fuelling office demand
Figure 1: UK market for serviced offices, 2011-15
Figure 2: UK serviced office providers, by number of locations
Bright outlook for business centre demand
Figure 3: UK market for serviced offices, actual 2011-14, and forecast 2015-20
Market factors
The rise in new businesses has increased demand in the north and Midlands.
Figure 4: Business start-ups in the UK, by region (Number)
Financial services accounts for the majority of start-ups
Diversification of office spaces to meet demand from changing working practices
Companies
Bruntwood
Regus
What we think
KEY ISSUES
How are national economic conditions affecting the serviced office market?
How will the rise in new business start-ups open up further growth opportunities for serviced
office providers?
Which industries will create the greatest demand for serviced offices?
Which regions will generate growth for serviced office operators over the next five years?
How can serviced office providers meet demand from changes in working practices?
INTRODUCTION
Definitions
Methodology
Abbreviations
Market positioning
The customer
The supplier
UK ECONOMY
Key points
Overview
Figure 5: UK GDP, 2004-15
Figure 6: Quarters after GDP peak, 1979, 1990 and 2008
Inflation
Interest rates
House prices
Consumer spending
Manufacturing
Business investment
Figure 7: UK GFCF 2003-15
Imports
Exports
MARKET FACTORS
Key points
Macro-economic trends and the service sector
Figure 8: Growth in UK economic output, 2011-15
The local economy
National economy
International economy
The SME sector and start-ups
Figure 9: Growth in newly incorporated companies in the UK, 2013-15
Legislation
Labour market
Home working demand
Figure 10: Number of home workers in the UK, January to March, 2010-14
MARKET SIZE
Key points
Figure 11: UK market for serviced offices, 2011-15
Serviced office providers continue to expand into third place and co-working facilities
Portfolio of serviced office offerings
Third place locations
Co-working
Flexible serviced offices to meet the demands of business life cycles
Office demand business life cycle
Innovative models are helping drive growth
Regions
Figure 12: UK market for serviced offices, by region, 2014
Largest rise in self-employment in 40 years
MARKET TRENDS
Key points
Changing labour market trends
Growing demand from new businesses and SMEs
Figure 13: Business start-ups in the UK, 2010-13
Figure 14: Business start-ups in the UK, by region, 2010-13
Figure 15: Business start-ups in the UK, by sector, 2010-13
Figure 16: Business start-ups in the UK graph, by sector, 2010-13
Prices rising across the commercial property rental sector
Figure 17: Price index for companies operating in the property rentals industry, 2011-15
INDUSTRY STRUCTURE
Key points
Industry development
Acquisition extends Regus’ dominance by locations
Figure 18: UK serviced office providers, by number of locations, 2014
Further acquisition
Staffing levels rising marginally
BASEPOINT CENTRES
Recent company activity
Figure 19: Financial analysis of Basepoint Centres, 2010-14
Company strategy
BIZSPACE
Recent company activity
Figure 20: Financial analysis of Bizspace, 2010-14
Company strategy
BRUNTWOOD
Recent company activity
Figure 21: Financial analysis of Bruntwood Group 2009-13
Company strategy
CITIBASE
Recent company activity
Figure 22: Financial analysis of Citibase, 2010-15
Company strategy
EXECUTIVE COMMUNICATION CENTRES
Figure 23: Financial analysis of Executive Communication Centres, 2010-134
Company strategy
EXECUTIVE OFFICES
Recent company activity
Figure 24: Financial analysis of Executive Offices, 2010-14
Company strategy
I2 OFFICE
Recent company activity
Figure 25: Financial analysis of i2 Office, 2010-13
Company strategy
LANDMARK
Recent company activity
Figure 26: Financial analysis of Landmark, 2010-14
Company strategy
REGUS
Recent company activity
Figure 27: Financial analysis of Regus plc, 2010-14
Figure 28: Financial breakdown of Regus plc, 2012-14
Company strategy
AVANTA SERVICED OFFICE GROUP
Recent company activity
Figure 29: Financial analysis of Avanta Serviced Office Group, 2010-14
Company strategy
FORSYTH BUSINESS CENTRES
Recent activity
Figure 30: Financial analysis of Forsyth Business Centres UK, 2010-14
Company strategy
FORECAST
Key points
Market size
Rising demand and further opportunities for growth
Workstation rates are set to continue rising into 2016 as demand for serviced office space rises ahead of the
supply of locations
Economic indicators boost serviced office optimism
Figure 31: Forecast UK market for serviced offices, 2015-19
Industry
Adapting to a mobile workforce
Technology led opportunities and threats
Increasing demand for co-working spaces, led by the technology sector
FURTHER SOURCES AND CONTACTS
Trade magazines
Commercial Property Monthly
Estates Gazette
Estates Review
Property Week
Trade associations
Business Centres Association
UK B2B
Trade research
Informal
Formal
Desk research
Consumer research
Sampling and weighting
Definitions
Qualitative Research
Further Analysis
Statistical forecasting

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