Any business looking to move to London is faced with a major dilemma, and that’s whether to buy or rent an office space. While both options are viable, buying an office space is out of reach for most businesses. That’s because, London is not cheap. In fact, it is one of the most expensive cities in the world.
As such, most businesses are stuck with renting space, which is a good option too. It has its advantages that make it a good option, even when a company has the money to buy space. For a business looking to set up an office in London, here are 3 pros and cons to renting an office space in London instead of buying one.
Pros of renting
- It is more efficient
Renting office space in London is efficient because, you have the option to go for a furnished office space, which makes settling-in fast and easy. Companies like London Office Space have packages for fully furnished offices, complete with everything that a business needs. This is very efficient, since it cuts on the time needed for a business to settle in London, and focus fully on its core operations.
- Renting frees up capital
Unless you are a business that is focused on real estate, there is no point in sinking capital in buying space. It is expensive, and the money for such a purchase can be committed elsewhere, in operations that actually add value to the business.
- It’s more flexible
With advances in technology, and an ever-volatile global political climate, business is getting more dynamic and things can change quickly. This means that what looks like a good business location today, may not be so ideal tomorrow. That’s why renting is much more efficient. When a business rents space, it can shift its location quickly depending on the prevailing market conditions. That’s a luxury that buying office space can’t give.
Cons of renting
- It leads to higher variable costs
London is not cheap, and rental costs are always going up. This means that when a business chooses to rent, it has to factor in increasing variable costs. This can be a challenge especially in times when business is slow, and revenues are low.
- There is no growth in equity
When a business owns office space, it benefits from growth in equity. London is a high demand city, and property values are ever on the rise, and this can lead to a huge windfall in the future, if sold. A business that chooses to rent does not enjoy such benefits. If anything it has to deal with ever increasing rental costs.
- Lack of flexibility in office use
When you rent office space, you can only use the office space for the purposes stipulated in your lease agreement. This can be limiting especially when you need to adjust the office to reflect changes in the business environment. This is a problem you would never have to deal with, if you choose to buy office space.
Based on the above pros and cons, you should be in a position to choose an option that best suits your business needs in London.