Office space in London can be costly -- that's no secret. Research shows that rental values have been rising in recent years too. After all, London is the financial capital of the world and world-leading businesses want to be here.
Such demand places pressure on supply of workspace in sought-after areas like The City and West End, simultaneously driving up rental values. For instance last year, prices for conventional office space in the West End broke records - amplified by competition between both residential and commercial developers for the same buildings - while demand for Grade A offices in The City shot through the roof.
But not all London office rents are sky-high. If that were true, the city wouldn't be home to such a vibrant startup scene. In 2015, over 200,000 new business startups were registered in London, with city boroughs accounting for 15 of the top 20 areas for company creation.
So how do small businesses find affordable office space in Greater and Central London?
Your City Office has been helping businesses of all sizes to find flexible office space in London for years. Here's our advice to small business owners who are seeking a professional, yet affordable, new base in the capital:
- Think Flexible: Serviced offices are renowned for their flexible rental terms, which typically features all-inclusive packages including receptionist services, telecoms, Internet access and essentials like building insurance and office cleaning. Sharing resources in this way generally reduces costs as opposed to sourcing your own independent solutions. Flexible workspace negates the need for complex contracts, meaning you can upscale (or downscale) relatively easily. Furthermore, agreements are short-term in nature; most business centres have rolling monthly contracts with low, manageable deposits.
- It's Good to Share: Some startups and small businesses may find a private serviced office suite is currently outside their budget. However many business centres now offer coworking, hot desks and shared offices alongside their standard serviced office product. Coworking offices are generally cheaper because the workspace is shared between multiple businesses. Often, these spaces provide a stimulating community environment that's supportive, inspirational and much more productive than working from the kitchen table. Even better, shared offices in business centres have the added benefit of on-site support plus the option to upgrade to a private serviced office when the time is right.
- Go Virtual: A virtual office in London provides a great stepping-stone into the capital. Ideal for mobile workers and home-based businesses, virtual offices provide a whole host of remote office services whilst giving you a real anchor in a London office building. A basic virtual office delivers a real business address with mail sorting and forwarding services, along with additional benefits like a local phone number, a receptionist answering calls in your company name, and even the opportunity to use day offices or meeting rooms on-demand. It's enormously cost-effective and a great way to create a real business presence in London, without paying over the odds for physical office space.
- Seek New Opportunities: New developments are springing up in London all the time, which begs the question: is an office in Zone 1 or 2 really necessary right now? The city's transport network is effectively 'bringing the outside in' more than ever before. Take Crossrail for instance. This new east-to-west rail line is connecting 40 stations across London and the South East, and opening up new areas of Greater London to high-frequency commuter travel. If workspace in Central London is currently outside of your business budget, it's certainly worth considering serviced offices in outer locations.
Remember that virtual and serviced offices are flexible by nature. Unlike conventional offices that seek long leases of 5 or 10 years, often more, the serviced office market operates on short-term contracts that's perfectly suited to help small businesses navigate early stage growth and market fluctuations. Likewise, no choice of serviced office is a long-term decision. Therefore it's prudent to choose an affordable office under a short-term agreement, until such time as your business is profitable enough to warrant a more central location and longer-term commitment.
For help and advice, Your City Office operates one of the largest flexible office search facilities in London. Get the latest advice fresh off the market by speaking to a member of our team today.