Which type of office should you choose?
London’s flexible workspaces and office spaces to rent have one thing in common: licence agreements. Unlike a lease, a licence agreement allows you to rent an office for shorter periods of time and there’s room for negotiation. Also, all-inclusive monthly billing makes it easier to keep track of cash flow.
Co-working
If you’re a solopreneur or manage a small team, you might decide to rent desks in a co-working space. Many run events for members, enabling you to network and grow.
Private office
If you want your own space, you can rent a private office in a flexible workspace. Shared amenities mean you’ll still pay a competitive price and get to meet other businesses.
Managed office
Designed with medium to large businesses in mind, a managed solution provides a self-contained, customisable workspace solution on flexible contractual terms.
London & Partners has been an invaluable source of support and guidance to ChargePoint in the months following our establishment as a UK company.Tanya Sinclair
Policy Director UK & Ireland
Finding an office
For ease and speed, a free flexible workspace broker can simplify the search process, as follows:
Browsing locations
London is a diverse ecosystem with pockets of communities throughout. From financial services in the City, to startups and creative enterprises in the east, it can be useful to be near your “tribe”, such as:
- West End: The heart of the capital covers Soho, Mayfair, Fitzrovia and Covent Garden. Many high-end retailers, galleries and established businesses in finance and media can be found here.
- City of London: Encompassing Bank, Moorgate, and Liverpool Street. London’s financial epicentre attracts banks, brokers, investment managers, private equity firms and other financial institutions.
- Tech City (Old Street): Tech startups and digital creatives can be found in abundance in Shoreditch and Hoxton.
Shortlist your options
Once you’ve shortlisted your favourite offices and discussed your requirements in more detail, your broker will arrange viewings. It’s advisable to view three to five options before committing.
Sign and move in
Most flexible workspaces are ready to go, allowing you to move in at short notice and get to work straight away. Contracts are typically between one to 36 months. Prices quoted exclude VAT, which is 20% in the UK. Expect to pay a two-month deposit upon signing, however, some charge less or no deposit.Serviced office costs across London
If your business can’t commit to a long-term lease, a serviced office is an ideal option.
Average costs per month
Prices are based on the average cost of one mid-range workstation per month and subject to VAT.
Exclusive rates on co-working space
London & Partners' clients can receive discounted desk hire with our London Touchdown Membership Package.
Negotiating a lease
It is a good idea to instruct a commercial surveyor and a real estate lawyer to advise you on your lease, but some key points to consider are:
The premises: consider what you need now and in the future. The lease will govern your ability to sublet, share or assign. You will need the landlord's consent to make alterations to the premises.
- Rent and service charge: you may be able to negotiate a rent-free period, a stepped rent or a service charge cap.
- Repair: you will be responsible for the standard to which the premises must be maintained during the lease as well as the condition they must be handed back in at the end of the lease.
- Break rights: if you need the option of terminating the lease early, a break right must be negotiated.
- Use: you need to ensure that the premises can be used as you intend – the position under planning law should be investigated.
- Data cabling: if you need new cabling, then you must ensure that the landlord will help you put in place the necessary agreements with the data operators.
Office space leasing
There are two options when it comes to acquiring an office:
1. Serviced office: a smart choice when looking to set up quickly, or to test the market without much commitment. With a monthly charge, it’s ideal if you’re looking for a short-term option, since contracts are six months to a year. Be aware, however, that when your contract expires, rates are likely to be renegotiated and may increase. You can also expect limited break-out space and meeting rooms, as well as less flexibility in decorating the office.
2. Conventional lease: This allows you to put your stamp on the property, with your name displayed in the building entrance, and the ability to tailor the space to your requirements for a more solid and permanent image. But with this comes greater rental costs - fixed for a minimum of three to five years. That said, as a long-term lease, there’s room for price negotiation. You may also benefit from rent-free periods. Plus, you can also assign or sublet the lease, with the opportunity to break the contract after a set period.
Before committing to a contract, consider the following:
Timing
When do you want to occupy the premises, and for how long? Factor in time for legal checks to establish the right of ownership and if there’s any planning issues which may impact the building. Considering the search and negotiation process, give yourself at least three months (or up to six if possible) to complete the process, including fitting out.
Location
Office location should be a top priority. Not only for transport links, but also proximity to customers, suppliers and competitors. Once you commit to an office, it becomes more difficult to relocate staff after expiry of the lease, and disrupting commuting can result in loss of talent.
Size
Your office size should reflect the number of employees using it daily, as well as room for a growing workforce during the term of the lease. Hybrid working is commonplace in the capital, which should be factored in, often three days in the office.
Budget
Remember to include property tax, building service charges, fitting out costs, fees and any potential taxes on top of rent. In this ever-complex market, sometimes higher annual property costs can mean better quality buildings and therefore lower initial capital expenditure.
Specification
If you’re particular about your office space and want to customise it to your requirements (e.g. cycle bays, enhanced cooling, branding on the walls), consider a conventional lease, which offers overall better occupancy options.
Lease commitment
Do you need flexibility or security? Serviced offices are best for short-term flexibility, but commercial options may be better value long-term. Leased contracts range from 18 months to five years, but breaks can be included.
Content provided by First Office Hub, HBC Real Estate and Bates Wells. This information is intended for general guidance only. You should always seek professional advice.
How London & Partners can help
Our team offers free advice to potential investors, from startups to established companies. We can:
- Help you find the best London office location for your business based on your needs, London demographics, access to suppliers and key customer markets.
- Connect you to our professional network of commercial property agents, lawyers and architectural/workplace planning consultants.
- Help you benefit from exclusive rates in our London Touchdown Membership Package.
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