Background

This short paper reviews the flexible, managed office industry and considers its implications for the regeneration and economic development policies of local authorities, regional development agencies and other public bodies responsible for regeneration and economic development.

Definition

By flexible managed offices (FMO) we mean serviced offices, business centres and managed offices, the main characteristics of which are:

• the provision of short term flexible office space;
• supported by a range of business services, and
• actively managed by on-site staff.

Business centres sometimes include studio or workshop units alongside offices and the comments in this paper apply to light industrial space in such hybrid premises.

The best known providers of FMOs are Regus and MWB Business Exchange at the more expensive end of the market and Workspace =, Evans Easyspace and Bizspace at the more economical end, but there are over 300 operators of FMO space in the UK.

The FMO market in the UK consists of approximately 1,100 offices with around 1,000,000 sq m of lettable space representing under 2% of total UK office space. This averages out at one FMO per 50,000 of the population, but this average disguises very wide variations. Outside London the average is one FMO per 75,000 population. Within the industry it is normal to measure space by numbers of workstations rather than by square metres or feet and DTZ estimates that at the end of 2006 there would be 200,000 workstations in the industry (source: DTZ Research Flexible Managed Office Market Stage 4 Report, September 2006).

2000-2006 saw rapid growth in the supply of FMO space with the number of available workstations in London rising from 26,000 to 52,000 over the period despite a significant downturn that occurred in 2001/02. It is useful to look at the reasons for this rapid growth rate.

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