As any reader of The Estates Gazette or Property Week knows, the demand for office space in the conventional office sector (the non flexible sector) has fallen sharply in 2008. This is not true for the flexible, managed sector. On a visit to the excellent Abbey Business Centre in the Swiss Re Building in the City of London, better known as The Gherkin, I was unsurprised to be told by Abbey boss, Julie Calder that the centre was completely full.
In general well located centres in central London are full, and those in outer London are still well occupied. Outside London the situation is more mixed, but across the industry as a whole the situation is much brighter than it is for conventional office space.
Why is this? The business centre industry has a strong counter-cyclical element to it. Although it is of course affected by recession, the way that businesses react to a down turn, by avoiding new long term commitments and seeking flexibility, favours business centre space.
In every down turn, some companies try business centres for the first time. Of those newcomers a certain percentage are permanently converted by the levels of service and convenience and never leave the sector. Recession is the biggest recruiter for business centre clients.