Innovative new co-lease deal
The Instant Group has completed an innovative deal at Fairfax House that places Sphere Knowledge in 2,800 sq. ft. of space in Holborn WC1.
The deal involves a two-year lease for space that is fitted out and fully managed for Sphere Knowledge by the Instant Group on behalf of Dorrington Plc. It represents a new way for landlords to provide more flexible, fully serviced solutions to the market and cater for the ever-increasing occupier demand for the sub 5,000 sq. ft. flex market.
The initial deal provides 45 work stations with the opportunity to increase the desk capacity to 68 as and when required. This fully-managed space was offered to customers on flexible terms from two years upwards, and fully fitted occupation was delivered within 4 weeks of lease signature.
The space was on the market for less than two months from listing to occupancy. Sphere is to pay a fixed all-inclusive monthly cost to Dorrington while Instant handles the fit-out and all the ongoing services for Sphere Knowledge within the space.
John Vaughan, Managing Director of Instant said: “The Fairfax House deal is representative of the new direction in which landlords are taking their portfolios, providing much needed choice for the 20+ workstation customer, seeking all the benefits of the serviced office within their own branded, private office space.
“Short form lease contracts, rapid occupancy, full FM services including IT, all at a fixed monthly cost with their name on the front door. This is the first deal of its kind in central London and we expect to see many more in the coming months as we successfully work with landlords to bring more Co-Lease space listings to the market.”
According to Instant Group data based on twenty years of flexible workspace transactions, demand from occupiers for +20 desk space – which equates to approximately 2,500 sq. ft. - has increased by 62% over the past five years in London and has risen by 11% in the past 12 months alone.
Enquiries from corporates in this part of the market have also doubled as more flexible solutions come to the market and are no longer seen as relevant to SMEs alone. However, research between Instant and commercial listings portal Realla shows that there are 1,300 office locations offering traditional letting options between 2,000 to 5,000 sq. ft. that are currently unoccupied.
“There has been a significant increase in demand for this type of flex solution under 5,000 sq. ft. in space and many, if not all, landlords are looking at new ways to meet this demand,” explained John Vaughan. “These clients want their own branded space that offers full service, agility for their business, but also privacy. Landlords have some of the best located properties; the barrier to successful lettings is peddling the traditional lease approach, but through our Co-Lease offer we have a solution to that. This is a chance for landlords to connect the existing supply of sub-5000 sq. ft. space to clients that are looking for flexible workspace solutions rather than conventional leases.”
Robert Harris, Director at Dorrington, said: “The Fairfax House deal is the first of what we hope will be many deals within our portfolio that satisfy the increasing demand for flex solutions, delivered in collaboration with Instant. Co-working and business centres are a great solution but they are not right for every occupier. Offering a private, customer branded space with its own front door in a traditional multi-let office building, ready for almost immediate occupation on a short form contract is an enticing proposition for this growing section of the market.”
