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Many workplaces are still way below pre-pandemic occupancy, which is pushing companies to consider their plan for office space, both now and in the future. As recession bites and cost cutting becomes inevitable, we’ve seen a significant interest in flexible office space and the opportunity it provides to businesses who may be facing some difficult decisions.

By switching to a serviced office provider, it allows businesses to buy time in the short term as inflation rises, interest rates grow and global uncertainty continues, and can give them the agility they need in the longer term even after the world economy finds a new equilibrium.

At Bath Office Co, we’ve seen first-hand companies of all sizes and from across the business spectrum shift towards this model of workspace; and as such, the supply of space is not expanding at the rate needed to keep up with the new customer demand. In fact the UK demand is continuing to outpace supply growth at a speed which has seen a rise of 22% year-on-year, resulting in vacancy rates at an all-time low.

This is due to the realisation that a serviced office makes sense for start-ups that would previously have had to commit to an onerous long leases as one of their biggest early costs; and at the same time, big corporates who are growing with the average transaction size 44% bigger than pre-pandemic levels.

At Bath Office Co, we work hard to provide a service that caters to everyone and support our customers through these turbulent and changing times. Equally we need to work hard to maintain out occupancy with a more transient population. We are able to offer more to the package than just an office and flexible lease – which we do through our additional add-ons and local collaborations. We then ensure all of these costs are covered in their monthly rent. This is another reason why people are turning to us, with research showing that most companies are only aware of 85% of the costs of occupying an office, often under-estimating the cost of office operational staff, insurance and professional and legal fees.

We have also seen that often when an economic crisis hits, companies under pressure have had to cut costs, first looking at headcount and tech, and only then turning to their property costs. Previously it was hard to escape long real estate leases, but with leases having got shorter over the past decade, property has now leaped ahead of people and tech as the option to reduce costs. There is no need to impact your human and intellectual capital when you don’t need to, by making people redundant, or risk reducing competitiveness by scaling back investment in technology.

The easier answer now is to let leases expire or for growing companies to retain or cut their office space and top up with flexible serviced offices. Flexibility and agility are now key components of workspace strategies, creating fresh options for business when managing their costs base. And as economic uncertainty grows and the pace of change in our world unlikely to slow, we expect to see this sector continue to grow and our offerings expand.

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