There’s no doubt that the serviced office market is a vibrant and dynamic one. But is there really a clear picture in anyone’s mind as to where the industry is going?2. Since 2008, the British economy has seen decline in the majority of sectors. Despite this, serviced offices continue to prosper and grow - why do you suppose this is? Can this growth be maintained?
Before the recession hit, the truth is that a lot of companies never really had to consider “value for money” as a factor in choosing a workspace. More often than not, companies just went with the most obvious solution before them, regardless of long-term cost considerations or real value for money.
The recession hit and it exposed not only financial weakness in some companies, but also their inability to flexibly react to market changes. In serviced offices, people are renting more than just a bit of office space. They are also getting the flexibility to expand and contract as market strength and size dictate. In the post-recession climate, all companies are now being forced to see this huge difference, and see that demand isn’t static and therefore they will need to be flexible to react to shifting demand.
Another factor to consider is the trend of manufacturing operations being shifted overseas, which is freeing up a lot of space that used to be factories, warehouses etc. This empty space would still need to be managed and maintained, which increases the burdens on the companies running them. This makes the serviced office sector all the more appealing, as all aspects of building management and maintenance are hired by the host enterprise. It’s no wonder then why many more companies are opting for serviced offices, prompting industry growth.
Companies save on costs and boost flexibility, but without sacrificing prestige and image. Despite what some may have previously thought about serviced offices, it is not a step backwards for a company to take one. In being able to focus entirely on their work operations, companies free up time and resources to attract more talent. You could compare it to the tablet PC, which while having a bigger price tag despite less parts, gives users vastly more flexibility through its portability and multifunctional nature, thus giving it incredible value. Serviced offices have the same advantages over regular office space or leased space.
Can industry growth be maintained? I certainly think it can be. Property prices are on the up, and therefore rents are also going up. We are entering a world of globalisation, populated by a more highly educated workforce that split into small dynamic teams. The serviced office product is there and designed to meet these changes. As long as the industry can stay current, it will grow.
One more factor that helps maintain the growth of the industry is IT infrastructure. IT demands are growing massively, and becoming more complex. At Carrwood, we’re running 60,000 square feet of office space , but individual companies are getting smaller. We have invested tens of thousands of pounds in IT systems for our business park – a financial burden a lot of individual businesses do not want to shoulder alone due to the lower number of staff employed in one area. It gives companies yet another reason to choose serviced offices, as it allows them access to the IT infrastructure viable for hundreds or thousands of staff in a remote 6 person sales office. In fact we have a lot of MDs saying that their IT solutions in their branch office at Carrwood are better than their head office down in London.
3. Can you sumarize in one sentance, what you belive is the primary function of the modern office?
To provide a good, central work location where people can focus, collaborate and develop.
4. Sustainability seems to be one of the most prominent focuses now in serviced offices. How important do you think it is to the industry overall? What steps have you implemented to generate sustainability?
Sustainability is certainly something that frequently appears in people’s enquiries when looking for new office space. My family has always been involved in farming, which as a highly mature industry thoroughly understands the importance of long-term sustainability and eliminating waste. Carrwood’s competitors often cite all the ways they make their buildings eco-friendly – a green place for people to work in. But in my opinion, they’re looking at the issue the wrong way round. At Carrwood, we take the user’s perspective as the primary focus, not the building itself. It’s fine putting in green systems, but if you don’t have the in-house knowhow of how to run and maintain them yourself, then the benefits are minimized.
For example, where many offices will turn their heating systems off over the weekend to “save energy”, Carrwood would keep them running at a steady low constant. If the heating had been off all weekend, and an employee cranks it up to 24 degrees as soon as they arrive on Monday morning, then the system will run inefficiently and wastefully as it fires up. We at Carrwood would keep the temperature at a steady 18 degrees all weekend, so that when the user comes in they might only need to put it up to 20, and in the long-term a greater saving is made.
5. What's more important currently in offices, location or quality? Do you think that this will change in future?
The adage “location, location, location” is massively dependent on the industry – I would suggest that quality is ever increasing in importance, but one can’t ever deny the importance of location. It’s hard to gauge the tipping point between the two. Productivity of staff is more important – so location must be tailored to maximise this. But location is diminishing in importance somewhat, as technology allows more and more locations to become viable.
Quality is not just a question of fixtures and fittings, but also about layout and knowhow. Without the knowhow, logic and experience to make a good set up, then quality doesn’t enhance productivity. To enhance productivity, Carrwood uses workspace, meeting space and the all-important “third space”, such as our atrium, break out areas and other spaces. These are all designed to give a wow factor and provide a productive environment.
6. Turning to location specifically, there are those who argue that major cities like London, Manchester, Glasgow etc. will always be the office 'hotspots', do you agree with that view?
Leeds is a very dynamic and forward-thinking city, and has frequently ranked in the top 5 UK for growth rate, best city for business and more. In 2009 it was awarded “One of Europe’s Top 25 Cities for Business”. It’s fair to assume that the top several UK cities will always be top, but HS2 and improving airport links might help shift the dynamic slightly. Technology will also help remove barriers and open up new areas for development. Also, those top cities will only ever remain “hotspots” if they also remain highly liveable. Without liveability, companies can’t hope to attract the best talent for their business.
7. For many years now, technology has been a cornerstone of the productive office, and its importance and influence has only grown. In the coming years, what do you see as, say, the 3 most important technologies that no office can do without?
First, super-high-speed Internet connectivity. The world is using less bandwidth per device but the number of connections is increasing. Serviced offices need to be there to meet the changes. The increasing prevalence of HD and other technological developments will increase demand on capacity, and so faster Internet will definitely be totally indispensible.
Second, Wi-Fi. It needs to be as secure and reliable as hard-wired Internet, and Carrwood is currently investing in new networks to be just that. At any one time we can have over 170 wireless devices connecting to the network in just one building, with around 120 permanent customers. This is a radical change from 5 years ago when there was only about 25-30% of that connection rate. Providing basic Wi-Fi isn’t good enough. It needs to be sophisticated enough to manage multiple connections and allow our customers the ability to tailor their own company policy despite there being others sharing the space. In 2014 we plan a big shake up of exactly how we deal with this, allowing customer privacy and simplicity while at the same time flexibility and security.
Third, software allowing collaboration and interaction by creating new “digital space”. The integration of social and collaborative tools will go hand in hand with this, such as moving a monitor feed to a projector feed quickly and simply.
Finally, cloud technology as an extension of the serviced office. Part of our recent IT investment is designed to increase the efficiency of cloud computing in our spaces, because people are carrying multiple devices now and cloud computing is what gives seamless integration of data and other information.
8. Can you offer some kind of summarizing 'prognosis' reagrding the future of serviced office? What's going to be the single most important direction that we're going to see?
The industry is still young, but has matured rapidly in recent years. It will continue to mature with more products coming out, and will adapt to how businesses want to work. The way I see it, the sector will only grow. It allows customers to increase their space in a dynamic way that gives flexibility to meet new market/customer demand.
