In January, the International Financial Reporting Standards (IFRS) came into force and all UK companies now have to record their real estate leases as assets and liabilities, which in effect will add a total of £200 billion to balance sheets. We expect this to dramatically change the way that businesses address their property needs.

Shorter leases will be viewed more favourably, a trend already gathering momentum. Sub five-year leases accounted for 42.1% of the market, according to the MSCI Lease Events Review.  This year, there will also be a record number of lease expiries and lease breaks, which give the SME market an opportunity to explore different options, especially in the flexible workspace market. 

The flexible workspace or serviced office market has gone from being a market disrupter to an accepted part of the real estate mix. It's now at the forefront of the workplace-as-a-service model, where workspace operates at its optimum in harmony with spaces to meet, collaborate, eat and socialise. And it offered leases as short as 12 months.

With growth of the flexible workspace market comes increased choice. There are experienced operators like us focused on the SME market, smaller ones seeking to service a local area and niche players that are looking to focus on accommodating specific industries or business types.  In the last year alone, we increased our footprint to 1 million sq ft, across London's West End and City as well as in Manchester and Birmingham. 

Alongside flexibility, another key attraction of serviced offices is that they provide the variety of spaces and amenity that many employees now want and that cannot always be accommodated in a traditional space, especially on a small floorplate. They offer creative, collaborative environments and a place to meet other like-minded businesses.

Wellbeing also plays its part. Serviced office environments are highly sophisticated and designed with optimum occupier comfort in mind. They are designed to help enhance productivity, drive efficiency, deliver resilience and create a healthy environment.

The client is at the heart of Landmark's flexible workspace model. We have a head of customer service who trains all of our staff to Institute of Customer Service standards. We are also adopting tools from the retail consumer world, where loyalty is paramount. Alongside review websites such as Google Reviews or Trust Pilot, we're using metrics to show client loyalty and prove quality of service. For example, Net Promoter Scores, which we adopted three years ago, measure the willingness of customers to recommend a company's products or services to others, and are used to gauge overall satisfaction.

Serviced offices provide businesses with the opportunity to benefit from all the amenities and environments that attract and retain staff, without the responsibility to manage them, the price tag or the balance sheet burden. As 2019 unfolds, there will be a greater emphasis on differentiation and service delivery, and therefore more choice for occupiers.

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