Managed Offices vs Conventional Offices

Securing the ideal office space is vital to accommodate your business needs and future expansion. Choosing inappropriately limits growth and may result in a disruptive office relocation. Therefore, it is valuable to develop a thorough understanding of the key differences between a conventional office and a managed office space.

A leased office represents a long-term commitment. Considerable time and effort are invested in an office search, including seeking approvals, contract negotiation, and more. The procedure requires many months before you can relocate to the office.

A managed (serviced) office is completely different. Wrest Park Business Centre, as an office provider, offers a range of offices of varying sizes for immediate rental. These private offices are flexible workspace solutions, accessible 24/7, and rented at a fixed monthly cost. The business amenities at Wrest Park Business Centre include super-fast broadband, comfort cooling, and a staffed reception area.

To help select the right office space, let us examine managed (serviced) offices closely before proceeding to conventional ones.

Managed Offices: An Overview

When evaluating managed offices versus conventional ones for the first time, it can be confusing for individuals new to the office market. Have no fear – we explain below.

Renting a managed office is straightforward, largely stress-free and completed in far less time. For business owners or busy office managers, it is reassuring to understand that the office provider makes their lives easier. Managed offices are fully managed, prepared, and fitted-out offices ready for immediate use. They include furnishings, flooring, connected utilities, cleaning services, and numerous amenities.

The services and amenities delivered are important for tenants. For instance, high-speed fibre internet is provided as standard. No tethering a shaky mobile internet connection while awaiting an appointment date to get the internet connected. It is available from day one, including anyone visiting on-site in the reception and common areas. IT assistance is also available, so if an issue develops, the technical staff are prepared to resolve it quickly.

The lease contract duration for a managed office is usually 3 months upfront, with a 1-month termination notice requirement. Certain managed or serviced office agreements are for a minimum of 6 months. These brief leases – measured in months, not years – deliver greater flexibility than conventional office leases can offer.

Conventional Offices: An Overview

Conventional office space is leased from the building’s landlord. Rented at an agreed rate per square foot, these offices typically come completely bare. While this may be preferable for some tenants, others may feel overwhelmed and need an experienced office manager to complete all requirements before moving in, which can be many months later.

All furnishings must be purchased or alternative arrangements made. Upgrades and maintenance, unless agreed in the lease, are the tenant’s responsibility. Utilities need to be set up with local suppliers. Any building maintenance must be undertaken, aside from what is outlined in the agreement.

Lease Terms and Legal Obligations

Most agreements are what is termed a ‘full repair and insure’ arrangement, which means the tenant bears complete responsibility for all maintenance and repairs throughout the lease period. There is also a requirement to undertake any dilapidations – returning the premises to their initial condition – at the tenant’s expense at the end of the lease.

Security is also a concern. A receptionist for the building might be provided, or visitors are required to review a list of tenants and visit the appropriate floor. A secure key fob system for all external doors and floor-level access protects staff from surprise visitors. This will not typically be included.

IT Setup and Connectivity Requirements

From a technical perspective, any network wiring, routers, access points, repeaters, and other equipment that allow staff to use an internal network must be established. Telephony and internet access require connection to the local telecom provider and compatibility with new phone equipment, computer systems, and networks. An IT team is essential to ensure all equipment operates properly from day one.

Lease agreements fall into 2 categories: long-term lease agreements and short-form leases. Short leases are a minimum of 18 months and might still have a 3-year duration. Standard lease agreements typically need a commitment of 5 to 10 years to the space and location. In an uncertain business landscape, that is a significant ask. Lease contracts also need substantial upfront deposits.

Comparing Managed and Conventional Offices

Let us compare a managed or serviced office at Wrest Park Business Centre (we use these terms interchangeably) and conventional offices.

In the office space market, they are worlds apart in terms of what you can expect to pay, how flexible they are, their customisability, and any services or amenities provided.

Cost Comparisons

Let us start with floor space calculations. What amount of space does each employee need? A solid benchmark is between 60 and 100 square feet per employee.

Example: Cost-Effective Managed Office Space at Wrest Park Business Centre

Fully furnished office space as a managed office is very affordable. For instance, managed offices at Wrest Park Business Centre range from approximately £405 to £6,747 + VAT per month, with sizes ranging from 2 to 40 desks across 157 offices. That is extremely affordable per square foot, considering that it includes utilities, telephony, internet access, IT support, cleaning, and other amenities. The deposit arrangement varies by office, but flexible terms start from 3 months, with a 1-month notice period.

Conventional Office Costs and Fit-Out Expenses

Leased office space in London often needs a deposit equivalent to 3 to 6 months’ rent. Monthly rents per square foot in London range from £25 to £45 per square foot for Grade A or B office space in emerging districts, increasing to £75 and £100 per square foot in sought-after locations including Covent Garden, North Oxford Street, Clerkenwell, and Farringdon. Installation costs can vary from £100 to £250 per square foot for a new occupant.

As you can see, managed offices are more cost-efficient. This is particularly true considering the bundled services, which simplify calculations and eliminate budgeting variability. Few businesses can reach an economy of scale where leasing a large office building starts to make sense.

Legal and Setup Costs: Managed vs Conventional Leases

Managed offices are ready to occupy, and the provider will typically have a standard template licence agreement that is easily understood by your solicitor. While there may be a small administration fee to establish the licence, it is typically very reasonable. By contrast, a conventional lease will involve two sets of solicitors billing by the hour to agree the format and complete the lease, with the landlord’s legal costs often paid by the tenant. You may also need to cover the expense of surveyors to agree on a formal schedule of dilapidations. This legal and professional involvement is a major source of both cost and delay in the leasing procedure.

Potential hidden expenses in conventional offices surprise many first-timers. Maintenance and repair expenses are somewhat unpredictable initially. Insurance and property taxes are additional charges. Furthermore, service charges, business rates, and early exit fees can stick in the throat. Managed offices completely avoid most of these issues.

Flexibility and Scalability

A managed office is typically provided on a lease of 3 to 6 months. Companies can easily scale their offices up or down based on current performance and future growth prospects. For instance, Wrest Park Business Centre has managed offices ranging from 2 to 40 desks across their 157 offices, depending on availability. Their flexible terms and ability to scale are significant advantages for businesses that require ultimate flexibility.

Conventional offices come with multi-year lease agreements and require months before a tenant moves in. This allows for limited flexibility in office size or for supporting the expansion or contraction requirements of a business. For dynamic businesses, managed offices are often a superior choice.

Control and Customisation

Managed offices provide reduced control over office design, office layout, and potential branding opportunities. Generally, offices are furnished and come equipped. Some office suppliers are willing to discuss which furnishings are delivered, subject to availability. This is the compromise.

Conventional offices permit tenants complete control over fit-out, office layout, furnishings, lighting, and almost everything else. This comes with the financial responsibility for all of it, their replacement, and maintenance.

For businesses needing control and customisation, some of their office spaces may remain conventional. However, other office spaces that do not require this level of specificity lend themselves to the managed office model.

Location and Accessibility

Prestigious office locations enhance a corporate image; unflattering locations detract from it. Overpaying for skyscraper views and marble floors in the reception area damages the bottom line. Perception matters in location decisions, and modern business centres provide excellent aesthetics for tenants and visitors alike.

Accessibility for people with disabilities is more crucial than ever. Older buildings struggle to cater appropriately. Companies have legal responsibilities to consider in this area. Managed offices are often newer builds that are better equipped to fully support everyone’s requirements.

Managed offices best support location flexibility. A conventional office lease typically locks the tenant into the same location for many years, whereas managed offices only need a few months in one location.

Services and Amenities

Professional reception services during business hours ensure your company maintains a polished corporate image with every visitor interaction. Mail handling and postal collection each workday means important correspondence never gets overlooked. All utilities are seamlessly delivered without the hassle of multiple supplier relationships.

High-speed fibre connectivity comes standard, providing reliable internet performance that modern businesses demand. Kitchen facilities and communal areas foster collaboration while delivering comfortable spaces for breaks. Extensive parking provision includes over 400 spaces at Wrest Park Business Centre, as well as EV charging points for environmentally conscious businesses.

Daily cleaning services maintain professional standards throughout all spaces, while comprehensive security systems, including 24/7 CCTV and secure access, ensure peace of mind. The technical support team stands ready to resolve any IT issues promptly and efficiently.

Additional amenities significantly enhance the working environment. Shower facilities support active commuting lifestyles. The stunning 90-acre parkland setting provides an inspiring backdrop that enhances productivity and employee wellbeing. Regular networking events create valuable opportunities for business development among the diverse tenant base.

With Wrest Park Business Centre, security is ensured via secure access 24/7 into the business centre. In addition to kitchen access, our offices are conveniently positioned near The Avenue Kitchen, where you can grab breakfast or lunch while enjoying panoramic views over the historic parkland.

Conventional offices provide either no services or the bare minimum. This restricts business operations, especially in the initial months of a new tenancy, where time is lost sorting out extra problems.

Added-value services with managed offices may include coordinated networking events for regional businesses. Shared areas allow a variety of tenants to discuss their work, network, and potentially collaborate on fresh ventures.

What To Consider When Choosing Your Office Solution

Budget considerations extend beyond simple rental expenses. Conventional offices typically need substantial upfront investments for fit-out, furniture, and equipment installation. Hidden ongoing expenses include maintenance contracts, utility suppliers, insurance premiums, and business rates. Legal fees for lease negotiations can consume considerable financial resources.

Managed offices present transparent pricing structures that bundle essential services into predictable monthly payments. This approach simplifies financial planning while eliminating unexpected expenses that can significantly disrupt cash flow projections.

Time-to-occupancy represents another crucial consideration. Conventional leases typically need 3 to 6 months for completion, including extensive fit-out periods. Managed offices often enable same-day occupation, allowing businesses to respond quickly to urgent market opportunities.

Operational complexity differs dramatically between these options. Conventional offices place full responsibility for building maintenance, utility management, and service coordination directly on tenants. This administrative burden can substantially distract from core business activities.

Consider your business growth trajectory carefully. Rapid expansion or potential downsizing may favour managed office flexibility over conventional lease commitments entirely. Geographic flexibility has become increasingly crucial, as managed offices typically provide much easier exit strategies.

The Wrest Park Business Centre Advantage

Managed offices enable new businesses to scale up or down, or relocate, without delay. While conventional offices have their place for large corporate clients, they prove overly restrictive and limiting in a rapidly changing business environment.

Entrepreneurs teaching business at the degree level often correct students when they are asked about the main objective of a business. Staying in business comes before profit, philanthropic objectives, or other concerns. The managed office model supports this by enabling far greater control and flexibility over office expenses and lease durations. The ability to grow with expanding markets or reduce costs in contracting ones, each has its place.

Conventional offices often constrain business owners inappropriately, resulting in higher expenditures when expenses must be reduced. These put added pressure on the employee headcount – staff the company must retain to survive sudden downturns. Making well-informed decisions about office space enables businesses to navigate challenging periods and emerge successfully on the other side.

Conclusion

Both managed offices and conventional offices have their place in today’s market.

Managed offices are more cost-effective, easier to manage, and come with a comprehensive range of services and amenities. Their lease terms are more favourable, with 3 to 6-month leases being standard practice. Deposits are often 3 months, with minimal time needed before moving in.

Leased office rentals need time to locate, negotiate, fit out, establish, and move in. Rental terms usually span from 3 to 5 years, with periods of 5 to 10 years more standard. Unlike with managed offices, the office design and customisation choices are completely up to the occupants. However, that all comes at a significant cost and considerable delays.

When searching for a new office, consider all aspects carefully. We are happy to discuss your specific requirements and book a tour of our managed office facilities at Wrest Park Business Centre. Our detailed guide on the available office spaces is also available. Please contact us at info@wrestpark.co.uk or call 01525 306000 to see how we can assist you.