The year 2000 was the peak year for CD sales around the globe. Spotify launched in the UK in 2009 for subscription music.
DVDs were slightly behind with sales still growing until 2005. Netflix launched in the UK for subscription films in 2012.
Since then, the business of subscriptions seems to cover almost every element of life. Indeed the Guardian recently put up a list of 16 subscription services to save you time and money which covered olive oil, books, spices, underwear, toilet roll, razors, pet treatments, supplements, beer, coffee, fruit & veg, maps, toiletries, and even hair loss treatment.
It got me thinking about offices and how we need to do some catching up in order to meet the expectations of the decision makers of today and tomorrow. Decision makers who may have never owned a CD. Decision makers who, when they don’t want their subscription meals for a week, just press the skip button. Decision makers who care about waste.
So, when it comes to the world of a traditional lease it can feel alien. Sign a lease for a fixed number of years. Pay a one-off upfront cost to fit it out to how you need it. Pay quarterly. Pay for the office regardless of whether you use it or not. And when you leave you have the cost of taking it all out again and throwing your old walls in a skip.
One can understand therefore why there has been a rapid growth in the take up of serviced office space; it’s a way familiar way of paying for what you need.
However, one criticism is that it can sometimes feel identikit and perhaps not as much space as people would ideally like.
We have therefore started to see a change in the more traditional landscape with fitted and furnished workspaces being delivered by Landlords who would have stayed well away from this idea 5 years ago. Landlords are seeking differentiation to give occupiers real choice in terms of design and layouts. This takes away significant costs at both the start and end of leases for occupiers. We’re now also seeing optional add-ons for office maintenance, cleaning, utilities, dilapidations too as the market shifts to a more all-inclusive basis.
My thought now is where this evolves too. How flexible can we really go? Will service charges become a fixed cost? In a world of flexible working, will we see offices used by one occupier for 3 days of the week and another the remaining 2?
How long before we reach the stage of a ‘Subscribe Now’ button?
