The Leading News & Information Service For The Facilities, Workplace & Built Environment Community

Business Centres Still A Centre Of Business Says BCA

28 July 2017 | Updated 01 January 1970
 

New research published by the Business Centre Association (BCA) in collaboration with CBRE has found that the business centre sector in London and across the UK continued to thrive in 2015 and 2016 despite initial fears about the impact of Brexit and its effect on the economy in the capital.

The findings come from 'The UK Business Centre Market' report which surveyed 580 business centres, representing 23% of the sector across the country, to assess the current state of the market. Overall, the report found the UK wide business sector is now home to 93,000 individual small businesses which employ over 480,000 people, supporting around £18 billion of GDP.

The research is published amidst a flurry of recent acquisitions and new entrants coming into the market place. In June 2017 alone, it has been announced that Blackstone have acquired a majority stake in BCA member, The Office Group, whilst Carlyle Group have made three acquisitions to boost its “Uncommon” flexible workspace venture. British Land have also launched Storey, a new flexible workspace concept.

 

This recent activity is predictable in light of the publication of the report which found that in London in 2016:

Occupancy levels in business centres in London have remained resilient at 80% which is the highest in the country. In Inner London, the figure increased to 84%, despite increased competition in the market place.

Serviced and managed office space dominates the business centre sector in London, with 93% of space falling into one of these categories.

The average amount of space taken by a business in London business centres is the lowest in the country. In London’s West End market, a business takes on average around 101 sq ft of space compared to the national average of 420 sq ft per business.

In London, 90% of businesses operating out of business centres have 5 employees or fewer. The majority of these businesses operate within the business services, finance and insurance sectors.

 

At the UK-wide level, the report found:

  • Turnover in the sector increased by 13% and the number of workers in business centres has increased by 11% in 2016 compared with 2015.
  • The amount of space taken per worker in a business centre has fallen by 8% year-on-year between 2013 and 2016.
  • 74% of businesses in business centres have 5 employees or fewer.
  • 39% of businesses stay in business centres for more than three years, up from 14% in 2013, providing further evidence that the sector is seen as a long-term option for those seeking flexible workspace for their business.
  • This increase in competition comes amidst wider economic concerns around Brexit. As part of the report, 38% of operators sampled said Brexit had a slightly negative impact on their business, 34% of operators sampled said it had no impact and 20% said it had a positive impact. Whilst it was felt there was an initial pause in activity after Brexit, demand for space has recovered.

Speaking on the impact of the EU referendum on the sector, the Chair of the BCA and Director of Sales at Bruntwood, Andrew Butterworth, said: “After the referendum, almost immediately enquiry levels and demand levels fell…but they have come back and are now tracking long term averages. Business confidence started to return and people decided they needed to get on with running their businesses. As recent investment and acquisitions in the sector demonstrate, the prospects for the future of the sector are extremely positive.”

The continuing success of the sector within the commercial market is also evidenced by the growth in competition over the two years, as high levels of demand from customers drives fleet of foot operator innovation, and creates clearer and more distinctive customer offers and facilities.

Commenting on the findings presented within the report, the Executive Director of the BCA, Jennifer Brooke, said: “Our sector continues to push to the front of the commercial sector, with operators able to respond to customers and technology in a way which the traditional office market cannot. Whilst 2016 was a year of some uncertainty for many in our sector, this survey shows that the sector continued to grow and thrive amidst the instability created by political events. And, of course, Brexit has not and could not have stopped the pace of technological innovation or stemmed the ever-increasing aspirations of customers for higher quality space and more responsive service from our members. The sector looks set to respond positively to what is likely to be a challenging few years to come.

In London, occupancy rates have remained resilient despite the increase in the competition within the sector and the shrinking levels of space each business requires for their operation. The report shows operators and their customers continue to have the confidence to invest and grow.”

Miles Gibson, Head of UK Research at CBRE said: "Our annual survey of flexible space providers confirms that the workplace is now changing very rapidly. Business centres are turning the very idea of the office upside down, and their model is proving very attractive, with growth in customers averaging 28% each year between 2013 and 2016. The customer expectations created by flexible space providers present both challenges and opportunities for landlords more used to dealing with long term leases and conventional fit-outs.

Picture: Miles Gibson, Head of UK Research at CBRE

Article written by Brian Shillibeer | Published 28 July 2017

Share



Related Articles

BigChange Receives Investment from Great Hill Partners

Mobile workforce management company BigChange has raised £75 million of investment from Great Hill Partners. The software-as-a-service company, founded in 2013,...

 Read Full Article
British Land Continues Evolution of Broadgate With New Park

British Land is progressing with plans to transform Exchange Square at Broadgate into a new park. Designed by architects DSDHA, the reimagined Exchange Park will...

 Read Full Article
British Land Continues to Prioritise Mixed-Use Real Estate in Annual Report

As part of their “Places People Prefer” approach, British Land plans to focus on developing their mixed-use offering, to drive demand for their...

 Read Full Article
Investors Stall On New Deals But View Property As A Secure Asset

More than 850 UK-based investors have been surveyed to uncover their property investment plans in light of COVID-19. All of the investors surveyed have investments in...

 Read Full Article
Churchill Group Confirms Investment From ESO Capital Partners

Churchill Group, one of the largest independently-owned soft service providers in the UK has confirmed that it has received investment from ESO Capital Partners UK...

 Read Full Article
Research Says Sustainable Buildings Will Bring Investors Tangible Financial Benefits

The latest research from professional services firm JLL suggests that investing in sustainable offices in central London will return “tangible financial...

 Read Full Article
Arcus Secures Strategic Investment From ESO Capital

FM company Arcus will become independent from Sainsbury’s, whilst continuing to provide FM services for its longest-serving client.  This new investment is...

 Read Full Article
$37 Trillion Worth Of Investment Demands Climate Change

631 institutional investors, managing more than $37 trillion in assets, have urged governments to step up efforts to tackle the global climate crisis. At the United...

 Read Full Article
£3.347 Billion Office Spend Outside Of London

The total investment volume and take-up of office space in 10 major cities across the UK in 2018 has been complied by commercial property specialists Savoy...

 Read Full Article
Ready For The Handover - Birmingham Takes Commonwealth Games 2022

The Prime Minister has already allocated £70 million to transform the current Birmingham athletics stadium for 2022's Commonwealth Games - with the City...

 Read Full Article