Serviced vs managed vs leased offices: which one suits your business best?

The world of work is evolving rapidly, with businesses constantly looking for workspaces that meet them where they are. Before serviced offices were a thing, businesses only needed to lease an ideal office space. Fast-forward to today, we have managed offices which promise the best of both worlds. But which one of these office spaces is ideal for your business? We have answered this question in detail in the sections below.

A serviced office is fully furnished and ready-to-use office space rented on pay-as-you-go terms. These offices are managed by real estate operators who divide the office building into separate areas or floors for different businesses.

Over the years, serviced offices have become one of the fastest-growing markets in the UK’s property sector, thanks to its flexibility, especially for agile businesses looking to scale on the go. Some of the key features and amenities to expect in a serviced office include:

• Office space: It comes fully furnished with workstations (chairs and desks), storage, and shelving. If you have your own workstations or office furniture, you may be allowed to bring them into the premises.
• Meeting rooms: These are separate spaces that may be included in the lease package or billed separately on an as-needed basis.
• Breakout spaces: Some serviced offices offer relaxation or brainstorming spaces to promote employee collaboration and productivity.
• Catering, leisure and fitness facilities: Amenities like shared kitchens, gyms, and shower facilities are available in some office buildings and are known to boost employee productivity and retention.
• Reception and management services: Some serviced office buildings come with a receptionist and an office building manager. The receptionist provides essential customer and client support services to everyone using the office building. A manager ensures all the operations are running smoothly and serves as a point of contact in case of any issues within the building.

When choosing a serviced office, consider the amenities that matter most to your employees. Factors such as the ideal location, office layout, and budget will help narrow down your options. That said, serviced offices may not work for all businesses. Here is a breakdown of the pros and cons to keep in mind.

Pros of serviced offices

• Flexible lease terms.
• They are cost-effective, especially for startups and scaling businesses.
• Most serviced offices offer high-end facilities and behind-the-scenes support services, such as IT, cleaning staff, a receptionist, etc.
• It is easy to find an eco-friendly office space that aligns with most businesses’ sustainability goals.

Cons of serviced offices

• Shared facilities may introduce operational bottlenecks.
• Serviced businesses may limit business branding opportunities.

A managed office space replicates the pay-as-you-go terms of a serviced office but allows you to brand the office and make it unique to your business. Managed office providers often work with their clients to design a branded workspace. This means you choose the office layout, the type and number of workstations and the amenities; then the managed office provider will go ahead and deliver the workspace as you specified.

The concept behind managed offices is the need to provide businesses with more flexibility in personalising their own spaces. This helps the companies create their feel, look and identity, which translates to building a culture that reflects and complements the corporate image.

Pros of managed offices

• It is more exclusive to your business.
• The all-inclusive monthly fee simplifies budgeting.
• It delivers more value for the money compared to leased offices.

Cons of managed offices

• It takes a longer time to move into a managed office due to all the custom modifications.
• It is relatively more expensive than serviced offices.
• Less flexible than serviced offices.

Unlike a managed or serviced office with workstations and amenities, a leased office is more traditional because you rent the office space directly from the building’s landlord or property managers. This offers greater flexibility in designing and building your ideal office space.

With leased offices, there are two leasehold agreements to choose from: short-term and long-term leases. Established businesses or those confident about their future often choose long-form leases spanning five to ten years.

Pros of leased offices

• They are more cost-effective in the long run compared to serviced and managed offices.
• They come with greater legal protection.
• Offers more flexibility for personal branding.

Cons of leased offices

• Comes with a higher upfront cost.
• Less agility in terms of scaling down, moving, or expanding.
• It takes a longer time to move in.

Choosing the ideal office space for your business requires carefully analysing your unique business needs, future goals, budget and more. You also need to consider the pros and cons of each office setup and how choosing one and not the other will impact your business in the short and long term.

Compare these 3 factors

Before you make up your mind, there are three key factors to consider. These are:

Cost efficiency for small vs. large businesses

Small businesses often benefit from serviced offices due to their lower upfront costs. On the other hand, larger companies may prefer leased or managed spaces for long-term savings.

Long-term vs. short-term flexibility

Serviced offices allow businesses to scale operations quickly without the high upfront cost. The company can downsize or expand with ease. Leased spaces, however, are less flexible, but they offer stability and predictability in the long run.

Customisation and control: serviced vs managed vs leased

Leased offices offer the most control over design and branding but require significant management, while serviced spaces are fully furnished and managed but with limited customisation. Managed offices provide a middle ground, balancing control and customisation with convenience.

Ask yourself 2 questions

If you have considered everything but still need that nod of affirmation before making the final call, there are two questions you can ask yourself: How much space does my business need, and what are my future expansion plans?

Assess the current team size and desk requirements while considering hybrid work and peak usage. Similarly, consider whether you will need to scale quickly or adjust operations.

If you can articulate these questions, you probably have an answer already.

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