What is a serviced office?
Invented in the early to mid-1960s, a serviced office is a fully furnished private workspace that provides access to various services and amenities such as meeting rooms, shared kitchens, gyms, team support and more.
These office spaces are located in a building that is managed by a third-party provider, who provides and maintains these workspaces.
Serviced office providers let businesses rent these spaces on a monthly, half-yearly and yearly basis, which is a pleasant touch of flexibility.
A cost comparison between serviced offices and commercial office space
The numbers tell the full story, and here we can clearly see the large cost savings of a serviced office.
On average, a serviced office is 40% cheaper than commercial real estate.
When factors such as office furniture, team salaries, building outgoings, technology and rent are all added up - the cost of running a conventional office space in an A-grade building is high.
On the other hand, a serviced office provider has an interesting proposition. A fully furnished office with access to conference rooms, coworking spaces, shared kitchen, private booths, secure Wi-Fi, along with your own dedicated receptionist, secretarial and IT support.
Our report which covers all of the average rental figures in Australia also found the top companies across the globe are cutting back on traditional office spaces. This includes firms such as Amazon, which are pausing construction of further office spaces to reduce their costs.
The list of what businesses receive within the total net rent presents a very significant cost-saving equation. This capital is important, especially for startup businesses that need workspace.
The exact numbers of how much money a business can save when leasing a serviced office over a traditional office can be found in our report.
What do businesses want from their serviced office?
Serviced offices provide the major benefit of having a large list of services and amenities included in the rental cost.
Unlike the traditional office, it doesn’t come empty and there’s an abundance of resources you would otherwise need to source yourself. But of course, some services and amenities are in greater demand than others.
Currently, some of the most demanded services from a serviced office are phone booths, internal meeting rooms and collaboration space. These services are especially beneficial for certain industries, such as accountants or law practices in search of workspaces.
The full list can be found in our free-to-download report.
Commercial office space occupancy rate
Undoubtedly, all the numbers indicate a greater supply than demand for conventional offices. In fact, office space vacancy is at the highest it’s ever been in 20 years and it has been forecasted for supply to increase continually, whilst demand remains slow for the coming two years.
Even the little things such as the cost of office furniture are catching up to the regular small business and the terms of a traditional leased office are becoming unfavourable due to lengthy lock-in contracts.
Most of this can be linked to the demand for hybrid work and inflation. Even large tech companies like Amazon are pausing the construction of additional offices and headquarters because they recognise the space will be underutilised.
In the current state of the market, sustaining or building a new commercial office space doesn’t seem worth it. Explore our complete report for a full understanding of Australia’s current office space vacancy rates.
Which office space is right for you?
Undoubtedly, serviced office spaces are in a very competitive position against the traditional office. But there’s no one size fits all answer.
A traditional office still has its place amongst businesses that desire complete control over the customisation of their office space. Regular office spaces are definitely more costly, but they also give a greater sense of achievement for business owners.
However, for businesses looking to mitigate costs, improve adaptability and operations, a serviced office is a great option.
Still unsure? Get the complete picture in our free detailed report which office specialists have made.
