Given the current economic climate, it’s an interesting fact that investment in office space during 2012 was valued at a total of £14.7 billion in London alone, an increase of 40 per cent compared to 2011 levels. New York and Paris are also experiencing impressive investment levels at £9.7 billion and £8.5 billion respectively. As businesses from the Far East continue to focus on establishing a foothold in Europe, in many ways there has never been a better time to invest in office space.
Advantages and disadvantages of office space investment
No investment opportunity is without risk, however, so it pays to do a little research before making key decisions about where, in what and how much to invest.
At the moment, the UK is in a particularly good position when it comes to overseas companies seeking office space due to the current financial uncertainty within the Eurozone. Firms that might generally look towards Frankfurt or Paris are considering establishing bases in the UK instead. Also, entrepreneurship tends to flourish in a recession as many people consider starting their own small businesses, often from home. As companies grow, however, their needs change; dedicated office space for expanding staff teams becomes a top priority.
The willingness of overseas companies to consider renting offices in the UK as well as the expected needs of small businesses are both important advantages for investing in the office property market. The disadvantages, on the other hand, lie in the fact that investments in the wrong geographical area or in places that key staff consider unattractive are not likely to prosper. In the same way, locations that are not convenient for customers and are without good transport links, for example, will not attract or retain commercial operators seeking office accommodation.
While a steady income from rented office space is an advantage, buildings that fall into disrepair or whose occupants default on payments are a liability.
Investing wisely in office space
The key to a wise investment is therefore to choose the right location, to have safeguards in place and to set rents at a fair level for tenants – all of which will earn a landlord a good reputation, which, in turn, attracts more business and helps launch a successful career in office space investment. When it comes to premises, choosing contemporary offices makes sense, as older buildings tend to be more expensive and more difficult to maintain.
Additionally, it pays to opt for locations that are tailor-made for convenience and geographically appropriate with easy access by rail and road, such as Arlington Square Business Park near Bracknell. This is a 22-acre urban business park close to Bracknell town centre and offers prime office spaces. A five-minute walk to the railway station and a five-minute drive to the nearest motorway make the location ideal.
Generally, business parks benefit from a landscaped environment, and many also have a range of additional amenities on site for office staff, including leisure facilities and places to eat or shop. Of all the types of property available, these are perhaps the most tempting for an investor.
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