Editor: I read Anthony Lorenz’s letter ‘What next for the co-working sector?’ with interest. As possibly the largest provider of specialist dilapidations services, we are well placed to assess market trends.
We tend to be the last people to view the office when a tenant vacates and we take an interest in where they are moving to while also trying to find out the reasons for their move.
Whereas previously there were numerous explanations, over the past three years we have been getting the same comments time after time from our tenant clients: “We are moving into serviced office accommodation because we don’t want to commit to a long-term lease until we have certainty.”
This can prove to be a double-edged sword, as the cost of serviced offices is undoubtedly greater than entering into fixed-term leases, but on the plus-side, it does come with added flexibility, allowing a tenant to move around without having a long-term commitment.
Once we head past the Brexit debacle, we at Dilaps UK are convinced from comments we are getting that companies will want to move back to traditional leases, albeit with the flexibility of shorter time spans and break options.
Whether the intended short-term move and experience of the serviced office sector will change people’s opinions remains to be seen. Certainly, the environment, which now offers significantly improved facilities for staff, can be seen as a big draw. But, equally, finance teams may look at the additional cost and determine that once one passes a certain number of people in an office, traditional lease set-ups become more cost-effective in the long run.
The co-working sector has grown tremendously in recent years and is working in parallel with the more formal leasing sector. Yet just as we see with the struggle between high street retail and online sales, there is not an unlimited requirement for office space, and one has to wonder whether something will give in the long term – when the UK knows where it is heading and the corporate world can again look to make long-term commitments.
Paul Lande, chief executive, Dilaps UK