CIPS survey highlights long-term cost benefits of serviced offices - serviced offices can achieve average of up to 78 per cent

Citation

(2002), "CIPS survey highlights long-term cost benefits of serviced offices - serviced offices can achieve average of up to 78 per cent", Property Management, Vol. 20 No. 2. https://doi.org/10.1108/pm.2002.11320bab.005

CIPS survey highlights long-term cost benefits of serviced offices - serviced offices can achieve average of up to 78 per cent

CIPS survey highlights long-term cost benefits of serviced offices - serviced offices can achieve average of up to 78 per cent

Serviced offices are now even more cost-effective for longer periods; for larger numbers of people and over a wider geographic spread, compared with five years ago, according to new research by the Chartered Institute of Purchasing & Supply (CIPS).

In a new CIPS report entitled The True Cost of the Flexible Office, total occupancy cost savings achieved by using serviced offices have improved vastly since CIPS carried out a similar survey in 1996. The report, which compares the costs of serviced office space against the total occupancy costs of taking the same quality office space on a conventional lease, highlights that serviced space can provide worthwhile savings across a range of scenarios, even in high cost areas such as the City of London.

Five years ago, using serviced office figures supplied by Regus, CIPS highlighted that serviced offices were cost-effective mainly for smaller groups, such as SMEs and new business start-ups, and for shorter tenancies. However, the new survey, also using figures supplied by Regus, shows that whereas in 1996 a ten-person serviced office in the City of London, occupied for 36 months, would be 6 per cent more expensive than a conventional lease, those same ten people would today make a 10 per cent saving by using a serviced office.

More significantly, a serviced office for 40 people in the City today would be 3 per cent cheaper than taking a conventional lease, compared with being some 47 per cent more expensive five years ago.

"Our research clearly demonstrates that serviced office space has now become a truly cost-effective option in all scenarios", comments Carolyn Munton, CIPS Director of Marketing and Communications. "Whereas five years ago our research revealed it was only really cost-effective in relatively low cost areas, such as Birmingham, or for short periods of time, this new research proves it can now achieve worthwhile long term savings too."

The report takes into account all occupancy costs, such as rent, furniture, office equipment, electricity and cleaning. Term periods of between 1-36 months and numbers of people between 1-60 were used as the basic criteria for evaluating cost. Figures for serviced offices were provided by the world’s leading operator of business centres, Regus.

Findings show that serviced office accommodation can provide savings over traditional occupancy methods in all scenarios, with average savings of up to 78 per cent being achieved across the eight locations surveyed. Actual savings vary depending on location, length of occupancy and the number of people to be accommodated, but the survey highlights savings of between 2-62 per cent in a high cost area such as the City of London, while savings of between 14-91 per cent can be achieved in a lower cost area, such as central Birmingham (see Tables II-IV).

Cities researched include Birmingham, Bristol, Edinburgh, Leeds, Manchester, Reading and London City and Central. Copies of the True Cost of the Flexible Office report can be downloaded from www.regus.com