Flexible working spaces are set to grow by up to 30% annually for the next five years across Europe, according to property giants Jones Lang Lasalle (JLL). Typically, flexible workspace operators tend to operate by offering shorter term licences as opposed to the traditional office take up strategy of longer term leasing. As a business developer for Hope Park Workspaces which offers both types of commitment, I’m often asked what the difference is. Each business’s requirements and needs are different so it’s important to know the Pros and Cons of both.
What is a licence?
A licence is an easy to understand legal binding contract which gives the customer permission to occupy on easy in easy out terms and does not require a solicitor. A Licence is typically used for shorter term periods from rolling monthly agreements up to 2 years. A licence can be drafted and completed quickly resulting in a quick move in to your new premises. These are predominantly used for serviced office spaces whereby the monthly cost is inclusive of most features needed for a business to operate in an office environment i.e Internet, Furniture, all utility and maintenance bills etc. This makes the monthly cost easier to account for.
Pros
Licences tend to be much shorter agreements including shorter notice periods, this gives your business the opportunity to scale up and down to a larger or smaller office in the building and poses less risk of long term financial commitment.
Extremely short move in periods which mean on some occasions, you can move into your office the same day that the licence is signed.
Tend to include everything you need in one monthly cost which reduces variable costs and makes budgeting easier.
Cons
Doesn’t give exclusive possession to tenant meaning less freedom to make your space your own
No long term commitment to space which gives less security for your business.
Landlord can serve notice
What is a Lease?
A lease permits exclusive use, solely to the tenant, for a set period of time. The tenant assumes control over the property during that time. Usually, a lease tends to be a medium to long term commitment and are more difficult to terminate unless break clauses are agreed.
Pros
Prices are considerably lower although the price excludes all the extras that come as part of a serviced office package.
With exclusive occupation of the space, there is more freedom to brand the space and make it your own.
Longer term agreement mean more security for the tenant
Cons
Can be a long and intricate process. Involving ironing out details on fit-out costs, dilapidations, service charges, other inclusives, break clauses and in some cases , agents fees
Can be long time to move in date
Whilst price is initially cheaper, when service charges, fitout costs, cleaning and maintenance as well as spending the time managing said charges. Prices can potentially be higher in total including the hassle of maintaining this in house.
What does Hope Park Offer?
Hope Park offers businesses completely bespoke workspaces. whether you require a private 1 person office or a whole floor we have a solution offering both licences and leases depending on the requirements of your company.
Get in touch to find out how we can support your business.