South West –
The rise of the satellite office
Is the satellite office the future of work? Demand for regional office space is growing as more businesses turn to the hub and spoke model. We look at the benefits.
Remote working became the necessary norm during lockdown in 2020. Has the pandemic just accelerated a trend of employees wanting to work closer to home?
Regional, or satellite, office space can provide a work environment closer to home than say, a central London office, and also reduce costs. In the last 12 months, rising demand for this type of office space has accelerated the hub and spoke model, with many businesses opting for a dispersed office space portfolio.
My office was Arbuthnot Latham’s first satellite office and back in 1994 it gave the bank a foothold in the South West.
Arbuthnot Latham now has three remote offices in Manchester, Bristol, and Exeter. Since I joined just over five years ago, the Exeter office has grown from ten employees to 33, and we now have roles undertaken in Exeter that were previously purely HQ-based jobs.
A desk in a regional centre like Exeter costs around 20% of a desk in London based on rental per sq. ft values, and I would argue employees have the opportunity of better work/life balance in Devon compared to London.
In his Arbuthnot Latham insight articles, Venaspace CEO Alex Bonnet talked about the appeal of coworking offices and said, "with employees working from home, some companies have also started to downsize, moving from a 30–40-person office to 15 max capacity”.
The benefits of using a satellite office space
Businesses looking to open up a satellite office might be expanding their offerings or emerging into new markets, so they will want some employees on the ground to network, learn about the locality, or handle in-person logistics.
Some of the major benefits that satellite office space brings are better talent, access to markets, reputation, and cost-efficiency. On the flip side, the disadvantages include managing cultural variation between offices and brand control. Without people under the same roof, inconsistencies can appear.
Our clients benefit from regional offices too. We often get clients commenting that they ‘like dealing with local people who they know and understand their way of life’. It is so much more difficult but of course not impossible to do this from ‘head office’.
There undoubtedly has been an acceleration of money moving from the major cities to the regions. This is most clearly demonstrated by the UK House Price Index (HPI) showing double digit annual percentage increases for most regions, with the South West annual increase quoted at 10.9% compared to London at just 3.7%. Interestingly, Yorkshire and Humber topped the charts with 14%. Local estate agents selling the more expensive South West properties have certainly been very busy, and my contacts report extremely high demand for coastal and properties with space. I have also heard of London buyers offering on coastal properties without even viewing them.
So, what does this mean for satellite offices?
Will they be in more demand, or will workers commute to their London HQ infrequently and just work from home most of the time?
My personal view is that the majority of businesses work best when their employees collaborate and to do that effectively, you need office space. If that can be close to home in a remote or flexible office space, then that is a good and sustainable position. I think satellite offices will increase and the centralisation trend seen in the last 20 years is now on the reverse.
The appeal of the coworking office – Part 1
We sit down with independent office space provider, Venaspace, commercial property provider, Bruntwood Works, and our own banking team to hear how the coworking office fared during lockdown.
10 things to consider before relocating your business
As part of our efforts to support business owners and leaders navigate through the lasting effects of Covid-19, we have identified 10 key areas that should be taken into account when considering relocation.
Becoming a client
Take control of your finances today by completing our enquiry form. Alternatively, you can call us on the number below and one of our team will be more than happy to talk about your future.