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Contract length on the rise

30
Sep
2016
Anne-Kathrine Utzon
One of the most striking results of MatchOffice's 2016 industry survey was the effect of the last twelve months on contract length - a healthy 15.2 percent of serviced offices saw year-on-year increases.

As serviced offices have become a viable option for large companies, as well as the SMEs and startups that have frequented them thus far, so contract lengths have increased. The serviced office industry will only grow in stability and revenue as larger companies with hopes of staying longer continue to flock to the sector. 

According to the MatchOffice Industry Survey 2016, nearly 80 percent of serviced offices in Europe over the first months of 2016 maintained or even increased last year's considerably high occupancy rates. 

"These overall statistical conclusions fully confirm my personal impressions, when I visit business centres all over Europe. Over the past few years, real estate industry has been moving in a very positive direction, with a significant increase in the number of new office hotels", said Jacob Dalhoff, CEO of MatchOfficeJakob Dalhoff

"More companies than ever today move into business centers and do not hesitate to sign longer contracts. I´m convinced that we´ll see this trend continuing throughout 2016."

Some shorter contracts and flexible working

Yet even given the good news, 17 percent of surveyed offices experience shorter contracts, which according to Jakob Dalhoff could have something to do with changes in the labour market. 

“More and more companies hire freelancers, consultants etc., instead of having them in-house. It creates a larger demand for serviced offices, and typically we see that these people don’t want to commit to a long contract." 

Analysis from the Association of Independent Professionals and the Self Employed (IPSE) has shown that the number of self-employed people operating in the 28 EU nations rose from 7.7 million to 9.6 million between 2008 and 2015 – an increase of 24 per cent - with Western European nations accounting for the majority of the rise. 

Chris Bryce, IPSE’s chief executive officer, said: “Right across the EU, huge numbers of people are seeing the benefits of being their own boss and they’re finding the confidence to launch new businesses.

Jakob Dalhoff is confident that these labour factors are translating into different kinds of office use. 

"Another factor could be that businesses work more flexibly nowadays, and this could also be an explanation to the shorter contract lengths”, he says. 

A mixed bag of north and south

Although, in general, serviced offices reported contract lengths to have remained relatively stable over the last year, there is regional variation across Europe. 

Sweden and the Netherlands saw the most impressive increases in contract length, with 17.6% and 19% respectively reporting increases. Although the Netherlands also saw a relatively high proportion of just over one-third with contract lengths decreasing, only France also had a figure of over 30% with falling lengths.

Southern Europe saw general success, with around average increased contract proportions in Italy of 14.3% and 17.9% in Spain. It was only in Belgium and Denmark that contract length increases fell below 10%, which could be due to previous success in those markets and the relative lengths of their contracts compared with the rest of Europe.

Read full version of MatchOffice Industry Survey 2016

 

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