The Difference Between Serviced Offices And Lease Offices

There are many types of office rentals out there to choose from but you will find that there are actually two main types, one being leased offices and the other being serviced offices. Both of them have their advantages or disadvantages but at the end of the day, when choosing a type, it does depend on the criteria required to run a business. There are actually quite a few pros and cons for these different types of offices and here are a few of the main differences explained in further detail.

​Contract Terms

The most obvious differences between these two types of business accommodations are the contract terms as they are quite different for both. A serviced office for example has a more simplified contract as opposed to a leased contract making it much easier and quicker to acquire the office. The contracts are also more flexible so you can have a 3-12 month agreement with the option to extend contract or even expand the size of the suite within a term period. Another advantage of this simplified contract is that you do not really need to appoint a solicitor unlike a leased contract where a solicitor thoroughly recommended. 

With a leased office on the other hand, the contract agreement is more of a complex affair and tie in periods are much longer. These are usually from 2-10 years, which is not a huge problem for established organisations, but for start-ups, this can be a high risk factor as there is uncertainty of how successful a new company will be. The process of acquiring a leased office is quite time consuming too due to all the legal implications involved and on average takes about 3 months to complete. Also, as mentioned before, it is well advised to appoint a solicitor for this type of contract as there may be certain clauses or points within the agreement that need to be assessed and re-negotiated.

Refurbishment

Another factor that should be considered about these types of offices is the refurbishment aspect. Normally leased offices do require a full refurbishment or even construction if executive suites or meeting rooms are required. This all adds up to the overall cost of the office space and let us not forget that this type of work will most probably need permission from the landlord too. On the other hand, serviced offices have the advantage in this department as office suites are already refurbished so there would not be any extra costs that need to be paid. Regarding building additional suites or boardrooms within the workspace, serviced offices have such a variety available out there that you could quite easily find a solution that already has your ideal configuration already, again saving money on building works.
 
The one great advantage about leased offices is that you do have full control over refurbishment. This advantage normally appeals to more established organisations that need their own identity or independence. However, this does not mean you cannot achieve a certain identity/style or independence from a serviced office. As there are so many styles out there to choose from, it is quite possible to find a serviced office that goes with a company’s identity anyway. Serviced offices can also offer, in many cases, whole floors to buildings in various sizes creating an independent feel to the workplace.

Costs

In our experience, one of the most important points in to why directors choose a serviced office is the simple reason that the monthly rent practically covers most of the costs incurred including buildings insurance, rent, rates, and service charges. Office space that is leased does not actually cover all these expenditures so rates, service charge, buildings insurance, and furniture figures are normally additional bills to be paid. Another benefit is all the extras that can come with a serviced office option. These include a staffed reception, boardroom/meeting room hire onsite, business lounges, kitchen/break areas, shower facilities, gyms, furniture, IT support, Broadband, telephone systems, security systems, air-conditioning etc. All these additional features would probably have to be added to a leased office so all these extras will add to the final price.
 

At the end of the day, many Directors and CEO’s do tend to prefer the serviced office route simply because there are so many added features and just one monthly bill. Rather than having the added stress of worrying about all the extra costs that need to be paid with a leased office, company owners do tend to avoid the extra headache and spend their valued time concentrating on their business.
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