What are the differences between serviced offices, managed offices and conventional leased offices?

What's the difference between serviced, managed and leased offices?

Are you considering a serviced office, managed office or conventional lease? Here we look at each in turn, explain simply what they are and compare the key features of each. The summary table below will help you compare formats and decide which is best for you.

You can read in more detail about the key differences in features and costs between serviced, managed and leased offices in our free PDF download here.

Office Freedom provides free expert advice on all aspects of office search, can answer any questions you may have and will help you find your perfect space.

What are serviced offices?

Serviced and managed offices come under the umbrella term of flexible workspace. Serviced offices are “work ready” spaces. You turn up, plug in and start work. Offices come fully furnished with furniture, utilities, IT infrastructure, security and management supplied. Serviced offices are available to move in next day and offer maximum flexibility, with contracts typically ranging from one month to two years. There’s no up-front capital expenditure and as far as possible, all costs are wrapped into one all-inclusive monthly invoice. Serviced offices are great for growing businesses who want maximum flexibility, short term solutions, great facilities and simple cost control.

What are managed offices?

Managed offices are a blend of traditional office space and serviced office facilities. This can provide businesses with the security of a traditional lease and the flexibility and features of a serviced office. Occupiers typically secure the space for six months to five years but are free from the onerous obligations of a traditional lease. A managed solution can deliver an individually designed and branded workspace with a package of services tailored to your business needs. Managed office solutions appeal to SMEs and larger businesses who desire more flexibility than a traditional lease can offer.

What are conventional leased offices?

Conventional leased office space involves renting directly from the landlord of the building, on a price per square foot per annum basis. Usually this involves a contractual commitment of between three and twenty years. It’s a long-term agreement. Conventional leases generally appeal to large businesses, confident of their future requirements. The leasehold contract document is often long and complex and frequently requires legal expertise. Businesses should be mindful of “upward only” rent reviews and their obligation to return the space to its original state at the end of the lease. Conventional leasehold space requires considerable capital expenditure at the outset. You will need to budget carefully for many expenses including; fit out costs, service charges, rates, security, IT, comms and utilities. Leased offices are popular with large and enterprise businesses who want private, bespoke workspace and who are confident of their long-term requirements.

What is included in the rental charge?

Read in more detail about the key differences in features and costs between serviced, managed and leased offices here. We look at the pros and cons of each office type and contrast the costs of flexible and leased offices. Download the PDF here.

Office Space - Frequently asked questions:

What’s the minimum term I can sign for?

The minimum term varies depending upon the space you wish to rent. On average, the initial license length for a flexible serviced office is twelve months but some providers will allow terms as short as one month.

What size office do I need?

This can be a tricky calculation as it depends on several factors. When you are calculating space requirements in a leased office you need to allow for corridors, break out areas, storage and other “non-productive” space. In a serviced office you only need consider the number of desks (people), as meeting rooms, event space, kitchen facilities, washrooms, storage etc. are provided as part of the package.

How much does a serviced office cost?

Serviced office costs vary widely depending upon location, size, demand, term, facilities, finish and many other factors. There are serviced offices to suit all budgets and all costs are usually conveniently wrapped into one monthly all-inclusive invoice. Often there are promotional incentives available to encourage occupation. The best way to review prices and negotiate the best deal is to engage an experienced broker such as Office Freedom.

How do I negotiate the best deal?

With so many choices available it’s difficult to be sure that you are getting the best deal. Unless you have detailed market knowledge, buying power and a wealth of experience, you are unlikely to secure the best possible terms. This is one area where an experienced broker, such as Office Freedom, could save you thousands of pounds.

What costs are included in a typical lease deal?

In addition to your net rental rate, you will pay extra for fit out costs, operating costs such as insurance, building and grounds maintenance, taxes, common area maintenance and cleaning, utilities and other expenses incurred by the landlord. You are also obliged to pay for the costs to return the space to its original state upon exit.

Where can I get the best advice?

Office Freedom is an experienced global office search consultancy. We cover the entire office rental market and our service is free and impartial. Office Freedom offers free advice and a personal concierge style service, finding offices that are perfectly matched to our clients’ needs. In addition, The Flexible Space Association, The British Property Federation and Government website www.gov.uk/browse/business may all be able to offer further advice regarding office rental.

Office Freedom:

Office Freedom has more than 26 years’ experience advising businesses on all aspects of their office search. We compare the entire market to find the most suitable office for your requirements. Whether you prefer a serviced office, managed office or leased office, Office Freedom can handle all aspects of the transaction from briefing to moving in. Our service is free and impartial, and we’ve advised more than 38,000 clients to date. For more information please contact one of our expert consultants today on 08005244118 .