Historically we’ve seen a polarisation in the UK office market, with traditional offices offering a fixed-term lease and wider fit-out opportunities on one side, and serviced space, providing flexible terms and the ability to move into fully-kitted out office space within a week, on the other.

Both options have pro and cons and lend themselves more readily to a particular type of business. Corporate firms tend to favour traditional office space, while start-ups and smaller firms appreciate the benefits of flexible, co-working space.

This division has highlighted an opportunity for ‘blended space’ where occupiers don’t have to choose between traditional and serviced options, but can instead benefit from a combination of the two by taking the best bits of each. For example, a business may want to fully brand the space it occupies, which is typical of traditional space. However, it may also want to enjoy the operational side of serviced offices, which generally have very high (think five-star hotel) customer service and, from a real estate perspective, offer more flexible lease terms that can be adjusted with the ebb and flow of a company’s growth.

A ‘one size fits all’ approach is not always the solution for some businesses, particularly in the current climate where political uncertainty is impacting decision making and the need for flexibility is vital. We’ve already seen some examples of this hybrid space emerging with the launch of Your Space at Chiswick Park by Blackstone, Knotel offering HQ managed solutions and occupiers such as SThree, which has taken part conventional/part flexible space in the same building in Amsterdam to accommodate their changing needs. In addition, landlords are recognising the need to diversify their offer in order to attract a broader client base, including co-working providers and growing numbers of occupiers who need more flexible terms.

As the competition for tenant retention heats up, we may even start to see more differentiation of product within single buildings as landlords collaborate with co-working brands or create their own brands to offer a range of space solutions under one roof. It’s not always about the amount of space a landlord or provider holds but the quality of that space, the service on offer and whether it matches the changing needs of today’s occupiers.

Whatever form this blended space takes, it’s clear that the focus and mind-set must be customer led, with user experience at the very heart of the space and service on offer. This is what will set landlords and providers apart.

Further information

Contact Savills Occupier Services