How the Growth of Start-ups Is Moulding the Office Market

A trend that’s picking up in interest recently is the rapid growth in the commercial property marketing. A change that is being experienced across the globe is the alarming pace of growth of new start-up businesses and how they are changing the office market. If we isolate the UK as an example, the country has a strong past of start-up businesses evolving into global brands such as the likes of Skyscanner and Deliveroo which both went on to be sold and valued at prices over the £1 billion mark.

What’s interesting is the sheer pace of growth in this new wave of start-ups, predominantly in the tech sector, is what makes it particularly notable. Access to global markets through online platforms and more readily available supply chains have provided entrepreneurs with the ability to scale up at an unprecedented rate.

On the surface, this does open the chance for office landlords to capitalise on the spike in demand and drive more value for their properties. The only hold back is the challenge of negating from the traditional landlord and tenant relationship where longer leases and stronger covenants increase book value. Two important considerations that contrast so greatly means that to adapt to the new surge of businesses (who typically want shorter, more flexible arrangements).

As you’d expect the emergence of the serviced office industry is a bi product to the growing number of start-ups, however, traditional landlords are also looking to creative leasing options that attract the new lease demand for commercial property. ‘Rights of pre-emption’ over surplus space – essentially a contractual right to acquire space before it can be offered to another party – now form a major point of negotiation and can be a way of accommodating business plans centred around fast growth. This is an option you should be instructing your commercial property management company to secure. Landlords have also find a way to improve the scale of ownerships, which means that occupiers can grow and move with ease within larger portfolios in contrast to the locked in to a single building approach.

Just as landlords are now considering both the life cycle of a building and their tenants, they are adapting design to respond to this ever-changing demand in commercial property. Increasingly buildings are now having to cater for differing style of workspace to include both formal and informal style areas along with the ever-growing need for meeting a variety of needs.

In this world of fast moving change and growth, developers and landlords alike are having to think harder than ever about building design to respond to customer needs. It has never been more so about adapting to the market and customers within it. Property management in Manchester & London have certainty acclimatized to this change with big companies such as Bruntwood identify the new to branch out to conquer this growing trend. If you’re a landlord who is struggling to work out whether to stay traditional for securing or adapt for improved business then it is always best to speak to local professionals who can provide guidance on how best to move based on the changes in your area.