Tied into a lease but have surplus workspace? Subletting could be the answer.
Businesses have been moving towards more agile, flexible and hybrid working for the past 10 years, but the events of 2020 accelerated the change. A steep increase in homeworking and remote working has led to lower office occupancy levels across the UK, and means that many businesses now have surplus floorspace on their hands.
According to Management Today, 1 in 10 companies reduced their office space in 2020, and another 36% were considering it as we entered 2021.
Subletting provides a valuable way to rationalise excess office space and increase the profitability of your investment, if you’re not nearing the end of your lease period.
Grey space
Sometimes referred to as grey space or tenant space, sublet office accommodation reduces the business’s lease liability. The original tenant business remains liable, but shares the cost of the excess space until the lease expires.
The rise of co-working premises means that an increasing number of businesses have adapted to and now embrace sharing workspaces with other firms. This setup improves networking opportunities, and the business that signs up for the sublet can move in immediately, avoiding fit-out and infrastructure costs.
Subletting grey space also provides an effective solution for businesses that are in flux, and unable to predict their long-term staffing or space requirements. If you’re not ready to commit to downsizing, subletting excess office space gives you more flexibility for future growth.
Can I sublet office space?
Before subletting office space, your first consideration must be your contractual obligations. Check your lease to ensure there are no clauses preventing subletting. In most cases, you’ll need to gain consent from the landlord as a minimum and s/he may impose conditions.
Secondly – have you completed a thorough needs assessment? It’s critical to review how you currently use your office space to calculate how much excess you truly have. Is it aligned with the way your business now works, and the company strategy? Have you forecast your staffing and space requirements for the year ahead? We’re experts in space planning and rationalisation. We can help you look at the way your business and its staff now operate and how they use workspaces – informed decision-making backed by decades of experience. Get in touch.
Where to start
Consider all the options and think creatively about different ways of working. Could you share time, rather than space, for example?
Timesharing
Rather than subletting a fixed area of office space, timesharing is where two or more businesses share the same workspace, but use it on different days of the week. This can work particularly well for firms with a high proportion of remote-working staff, and potentially provides a considerable cost saving.
Refitting and upgrading
Regardless of who you want to sublet to, and on what basis, you need to ensure the space is attractive, functional and effective. Competition is fierce. Since March 2020, there’s been a huge increase in the amount of grey space on the market – particularly within cities – as Covid-19 changed the way we work.
Remote working has increased and headcount in some areas has reduced, but the office still has a crucial role to play. While many now enjoy the freedom and flexibility of working from home – and the time and money saved on commuting – isolation, productivity and mental health must be considered. And the invaluable opportunities that come from collaborating in person.
There’s no substitute for face-to-face contact and in-person communication, so the office will never become obsolete. Its role is merely changing.
Space requirements have naturally reduced, so an increasing number of firms are looking to sublet. You need to ensure your workspace can compete – and we’d love to help you.
How to attract tenants
We want to help your business thrive. With more choice than ever before, tenants’ expectations are higher. Anyone wishing to downsize and considering a move into sublet space will not accept a downgrade in quality of facilities and interiors. We’ll help you complete a professional fit-out that will accommodate your own business needs and attract the right tenants. We know how to help our clients create effective, high-quality workspaces that people want to spend time in. Find out more.
We have decades of experience in helping firms rationalise their space, maximise their property portfolio and attract quality tenants. We specialise in interiors that promote and enable flexible working and prioritise wellbeing – spaces that ensure you, your staff and your tenants all thrive.
Next steps
Businesses must adapt to survive, and now is the perfect time to review and rationalise your workspace requirements. After the 2008 recession, subletting skyrocketed. So if you’re ready to get the ball rolling, get in touch – we’d love to help.
