Office Space in Town: Creating a new generation of workplace

One to watch

VITAL STATISTICS

THE NEED-TO-KNOW

What problem are you trying to solve?

Office Space in Town (OSiT) was established to respond to a growing demand for a new generation of workplace. For today’s fast paced and rapidly evolving businesses, there is a need for workspaces that are fully equipped and adaptable, with contracts that are flexible. Traditional leases offered by conventional office providers can be as long as 25 years, which is a commitment that many businesses are not in a position to make.

This generation of workers also spends more time in the office than ever before and OSiT’s offices have the feel of a ‘members club’ rather than work place.  Each building is carefully designed to provide high quality office space, with unparalleled facilities which extend beyond traditional office accommodation, to include in-office salons, cafes and even bedrooms.

How big is the market – and how much of it do you think you can own?

The UK serviced office market is growing rapidly. Last year, we launched a report that laid out the success of the serviced office industry to date and projected its significant potential. According to the report, the UK serviced office sector is currently worth £16bn, which is expected to significantly increase in value by 2025, to £62bn on conservative projections and £126bn on more optimistic forecasts. OSiT’s two joint ventures are valued at £160m and over the next five years, we hope to expand our portfolio significantly, acquiring five more office buildings across central London.

How do you make money?

OSiT operates a freehold model, which means that we benefit from the appreciation of the bricks and mortar of our buildings, as well as the various income streams generated from the operating business including rent and revenue from services, such as IT and reception facilities and also variable services, such as events and meeting rooms.

Who’s on your team that makes you think you can do this? 

We are a family business. The idea for OSiT began with a single serviced office in Northampton, opened by our mother in 1979 and in 2009, my sister Niki and I established OSiT. Whilst our business has grown exponentially and we now hire around 50 staff, we remain a family business and this ethos is reflected across the company. Our staff is a top priority for OSiT and we do our utmost to create a highly-motivated working environment that actively supports learning and development. Every member of our team plays a critical role in making sure OSiT continues to be successful.

Who’s bankrolling you?

Last year, we secured funding from a leading Chinese real estate asset manager, Kailong, which invested in OSiT’s two London serviced office joint ventures. Kailong’s investment follows that of global real estate investors, Forum Partners which backed our first serviced office joint venture, LSO I. We are also in advanced talks with other investors as we pursue our ambition to open five more building across London.

What advice would you give other entrepreneurs trying to secure that kind of finance?

It’s important to stand out from the crowd to attract investors and to show that you can outperform your competitors. Demonstrate to potential investors that you have a unique model with a proven track record, which can be replicated and that presents a scalable opportunity.

What do you believe the key to growing this business is? 

To do what we do and do it exceptionally well. We spare no attention to detail, from the exceptional design of our buildings to our meticulous customer service – we even established our own cleaning company to ensure that the service is faultless. This is what will keep us a step ahead of our competitors.

What metrics do you look at every day?

We keep a close eye on our occupancy levels and tenant pipeline, so we can maintain the near full occupancy rates across our offices.

What’s been the most unexpectedly valuable lesson you’ve learnt so far? 

You mustn’t be scared to be the first to try something. We realised that serviced offices didn’t have an industry-accepted valuation method and since then, we have lobbied for consistency and a distinct valuation framework that ensures the sector is not undervalued. We even pioneered our own valuation model, the ‘Fuchs Formula’, to kick-start the debate across the industry.

What’s been your biggest mistake so far? 

Not doing this sooner.

What do you think is on the horizon for your industry in the year ahead? 

The serviced office sector’s exponential growth looks set to accelerate. In response to the sector’s success, we are already seeing established and traditional landlords try their hand with flexible office space. As the market matures, we expect that the wider industry will join the valuation debate around serviced offices and bring us closer to agreeing a dedicated valuation method. 

Which London start-up/s are you watching, and why?

We are always on the lookout for potential partners who do what they do to the best of their ability. We partner with catering, beauty or events businesses that help us to provide HQ-level office facilities for our tenants.