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Press Release: UK Serviced Offices Market Development Report

Released: April 2011

After researching the UK serviced offices market development and taking into account various other factors the following conclusions can be drawn from MBD's report:

Market Review 2006-2010:

In 2010, the number of serviced offices is estimated to have reached 174 000, representing a moderate 2% increase in the year. Annual growth in the volume of workstations is expected to be more subdued than evident in previous years, reflecting the difficult economic conditions. Indeed, a 2% decline was recorded in 2009. The recent economic recession in the UK has had an adverse affect on small to medium businesses, dampening demand for serviced office accommodation. Nonetheless, a number of large serviced office providers reported surges in enquiries as companies seek flexibility during periods of uncertainty, partially negating the fall. Moreover, tighter credit conditions have meant fewer freehold transactions have taken place in the offices market, with some larger companies opting for short-term space instead.

Between 2006 and 2008, the UK market for serviced offices increased year-on-year, culminating in growth of 7% to 174 000 workstations in the latter year. Prior to 2008, growth in the market was driven by high demand for office space as a result of a strong performance by the UK economy and in particular the financial sector.

Market Forecast 2011-2015:

The total number of workstations in the UK serviced offices market is anticipated to increase throughout the forecast period up to 2015. Indeed, in 2011, growth of 3% is projected to take the number of workstations to 178 000. In the following four years, MBD anticipate stronger annual growth of between 3% and 5%, as most sectors begin to recover from the adverse effects of the economic recession and potential new-business start-ups could begin to stimulate demand. Overall, the number of workstations in serviced offices is forecast to increase by 22% over the five year period. Although the economic downturn exerted downward pressure on the market, it also provided an opportunity for serviced office providers to prove to larger corporate clients they can rival fixed lease agreements in terms of services and reduced operating costs. MBD therefore remain confident that there is sufficient demand to generate further growth over the five year forecast period, despite the economic circumstances.

Note to Editors:

MBD specialises in business to business market research. The range of reports and industries in which we operate in is constantly expanding (our portfolio comprises of more that 140 titles). All our reports are written by in-house market consultants.

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