Recession fear increases use of serviced offices - 26.02.2008

Banks and financial services companies in London are just one sector to have continued to make a clear move towards flexible serviced office space with an 80% per cent increase in take up during the last quarter of 2007 compared to the same period in 2006. This reflects a continuing trend for banks and financial institutions to attempt to more closely manage their property risk in the post credit crunch environment, according to the latest MWB Business Exchange quarterly serviced office space index.

Consultancies and property companies join banks and financial services companies in significantly increasing the number of workstations (75% and 14% increases respectively) taken up in flexible serviced offices in Canary Wharf, the City and the West End with the desire to be more flexible driving the take up throughout London.

John Spencer, CEO, MWB Business Exchange, commented: “With the financial markets suffering from the fall out from the credit crunch and with growing acceptance that 2008 and 2009 will be tough for all sectors, banks among others are taking precautions to ensure they can minimise exposure to risk where they can. Taking out  traditional ten, fifteen or  twenty  year leases does not allow you much flexibility which is why so many companies are looking to a more flexible and risk adverse route.”

Spencer continued, “From April this year companies will have an added motivation to avoid having unused office space on their books as they will have to pay full business rates on office space left empty for more than three months. One way they can avoid this is to take up all or part of their office space requirements in serviced offices, where they can expand and contract to reflect the market conditions.”

The research also showed the transport industry take up of serviced office space rose by 105 per cent, reflecting the large number of infrastructure projects and rail franchise bidding which took place in 2007.

MWB Business Exchange compiles the index by tracking the sectors that are hiring additional workstations and compares the growth to previous years.

MWB Business Exchange Plc provides five star Serviced Offices, operating a portfolio of over 1,500,000 sq ft of prime office Space throughout the UK, Meeting Venues with over 250 meeting rooms, and Virtual Offices.