There is no ignoring the effect of the flexible workspace revolution in the UK office market. In the last few years, the flexible workspace operators have underpinned a significant element of new office lettings. Previously, the often uninspiring and bland offering meant that serviced offices were used out of necessity rather than choice.
This has rapidly changed and the new operators provide dynamic, aspirational and design-led spaces in well located buildings which offer an attractive alternative for occupiers who would not traditionally have ever considered serviced office use. This has opened up opportunities for landlords.
Operators’ models differ but they can offer landlords longer leases than they would otherwise obtain in the current market (ironically often without the flexibility of break clauses which are now common place in traditional lettings) at attractive rent levels.
Landlords have also been embracing the sector by either offering their own flexible product or partnering with an operator, perhaps under a management agreement in a manner not too dissimilar to hotel operator management agreements.
As ever, there are always points to consider, irrespective of whether the landlord is looking to install an operator as their tenant or to partner with the operator in a management style arrangement.