By Daniel Hunter
Long term office tenancies are fast becoming a thing of the past as businesses looking for more flexible working conditions, according to new research from Citibase.
Ninety percent of small business owners and directors said they would only agree to a tenancy between six months and three years in length. None of those surveyed said they would agree a five year or more tenancy.
This sits in stark contrast to traditional office tenancies which are based on long lease terms, often upwards of ten years. Over half of respondents also felt that office landlords were not doing enough to attract small businesses.
Steve Jude, CEO, Citibase, said: “The world of work has changed forever and the commercial property sector, needs to do more to support the growth of British businesses, particularly the growing number of start-ups and SMEs who require more flexibility.
“The growth in technology, increasing globalisation and the recession has combined to instill greater uncertainty into small business owners, which means they are now unwilling to commit to long term agreements. They want the ability to change with the natural ebb-and-flow of their business, to up and downsize when required; not be contractually tied to an ill-suited agreement that costs the business time and money.
“Landlords and office providers need to do much more to support the growing number of start-ups and SMEs in particular. They need to listen to these results and embrace the needs of small businesses. The far sighted landlords with whom we are working have readjusted their traditional view of managing an office asset and have understood that our new, disruptive business model bridges the gap between the needs of entrepreneurs and landlords.”
At a time where new laws regarding flexible working have been introduced, another interesting finding of the survey was that most business owners, over 72%, preferred working from a professional office environment to a home office, citing that productivity increased in a formal office location.
Respondents were also asked what they considered to be the most influential factors when they were looking for new office space. Unsurprisingly, the cost of space was deemed to be the most important, but more poignantly, also in the top five was length of tenancy agreement (two), flexible tenancy agreements (four) and flexibility to upsize or downsize (five). Well managed office space came in as the third priority.
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