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Can serviced offices really be cost effective for larger workgroups

Paris. Business Services Organisation. 40 desks

When a leading UK Business Services organisation required office space for 40 people in Paris, the local team considered their usual solution of utilising a 3 to 5 year conventional lease.

Why was this the only solution considered?

Three key reasons:

  • The company wanted to create their own space, with a particular layout for individual teams and Meeting rooms, rather than be tied to a predefined layout of a serviced office
  • They believed serviced offices were more expensive than a conventional lease
  • Conventional leasing is the way they have always taken office space, for larger requirements

However, the Global Property Director had experience of achieving organisational goals through flexible space and knew it was worth exploring a serviced office solution.

In this instance, the organisational goals were very clear:

  • Secure office space that reflects the company culture and working environment
  • Create a layout that allowed specific teams to work together and collaborate with others
  • Remain flexible as the business grows and staff numbers are likely to increase
  • Avoid any capital expenditure

Consequently, the client appointed Offices iQ to provide serviced office options for their 40 people requirement within Paris. This followed similar searches in Shanghai, Singapore, Dallas and Amsterdam.

So, we commenced our search. Looking for a 40 desks in a serviced office will always be more challenging than smaller requirements, but finding the right space is often possible with a thorough search and exploring varying options, such as acquiring additional floors and utilising surplus space with other corporate clients.

The required location in this instance was within a very small area of Paris. However, our search still discovered 3 possible options and following one day of viewings, the ideal location was identified.

Whilst the space was perfect to support the client’s corporate standards, there were still a few challenges to overcome. The layout of the area, first of all, was certainly not ideal. Although the accommodation was located on the same floor, the offices were the wrong configuration and there was another client occupying an office in the middle of the space.

Having found the perfect location, we now set about working with the provider of the space to achieve the ideal solution for the UK organisation. In order to make this happen we had to achieve the following;

  • A floorplan and layout that reflected the team and collaborative needs
  • Request that the existing client move to alternative office space
  • Negotiate a commercially viable rate with no capital expenditure to the client for fit out

After achieving all of the above, there was an additional fit out cost of €45,000 to create the perfect space. It was agreed that the provider would fund the fit out works, culminating in a commercially acceptable solution for all parties involved. The final cost to the client was a workstation rate equivalent to €405 per desk per month, creating a total monthly cost of €16,200 for 265 SqM, which included IT, Telco and staff beverages The office space is on a dedicated floor with private access.

The monthly rate of €16,200 equates to approximately €61 per square metre per month. In this case, the cost per square foot of the serviced office was comparable with that of the conventional leasing option when rent, rates and service charges were all considered. However, in addition to achieving a comparable monthly cost, the client also saved a cost of €150,000 to fit out the conventional space, ultimately making the serviced offices the more cost effective option.

Summary of Benefits.

Whilst financial considerations are of the utmost importance, they are most definitely not the only consideration. The resulting benefits to the organisation in Paris are outlined below;

  • A saving of €150,000 capital expenditure to fit out the conventional space
  • Serviced office rent comparable to the full cost of conventional
  • Flexibility to upsize and downsize as staff numbers change
  • Maximum agreement of 12 months. Renewable annually
  • One fixed monthly charge to cover all services, therefore no unexpected costs
  • Inclusive pricing of rent, IT, Telco and beverage services
  • Space created to match corporate image, work within teams, and collaborate

This case study is just one of many examples of how flexible space can be an effective solution for all staff needs, proving how important it is to evaluate all of your office space options, regardless of your staffing numbers.

We are always here and ready to find the best flexible space alternatives for your business situation.

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