Why Owning Your Own Office Space Is A Thing of the Past

There was once a time when you might have considered owning office space a good idea or even essential. Back in March 2016 RealBusiness said that there was “no correct answer" to the question of whether you should buy or rent a workspace.

The site acknowledged that the former was the pricier option, but added that “it often comes with more freedom; instead of paying rent every month, you’ll be investing in an asset.” Alas, since then, many things have changed — and left renting the much more financially attractive idea. 

What used to be perceived wisdom about the buying-or-renting debate?

The word “investing” has already been mentioned — and, indeed, owning an office used to enable businesses to sit on a physical asset that would grow in value over time.

There was also the plus point that, as the business was not simply borrowing the office, it could quickly and easily be redecorated to suit the company’s needs. This could prove a real boon for building brand power, as a logo and colors could be displayed in various parts of the space.

However, the beneficial effect of all this would largely depend on the company continuing to occupy the office for the long haul. After all, it could be financially counterproductive for an office to be expensively tailored to a specific firm that proceeds to vacate the space shortly afterwards.

Even in 2016, RealBusiness noted that, for this reason, “if your business is growing rapidly, renting your new office space may well be the best option”. 

What’s changed since 2016? 

Well, when that question is just taken at face value, the obvious answer is: quite a lot! However, while Brexit, the COVID-19 pandemic and the war in Ukraine have been significant events, it needs to be pointed out how these have impacted the corporate landscape.

Let’s start with Brexit. After the Institute of Directors (IoD) asked its members what would enhance their business operations in 2022, the most common response was “a new trading relationship with the EU”. In a separate IoD survey, 42% of internationally trading UK firms were found to be exporting less to the EU in 2022 than had been the case five years earlier.

If your business is eyeing worldwide markets, you could therefore benefit from striking a flexible rental deal for a serviced office in Central London. That way, you would still have ready access to various partnership opportunities but be able to tweak your office rental deal if or when required.

You could modify that deal to free up more office space for your business if it has any employees who have been working from home since the pandemic but recently decided that they want to return to the traditional office. 

Similarly, renting an office could enable you to time-effectively expand its amount of space if, say, the Ukraine war soon comes to an end and your company starts financially flourishing as a result, putting you in a position to add more workers to your firm’s payroll.