Co-founder and managing director of Orega Zachary Douglas can help landlords make the switch to serviced offices
Landlords face a conundrum. It’s a question of yield versus convenience. To get the most profit from a commercial property the best option is to run a serviced office. Demand for serviced offices is soaring and hosting multiple tenants on serviced contracts pushes revenue upwards.
On the other hand, the simplest thing is to rent to long-term tenants. The yields are low, but landlords stick to what they know. Running a serviced office isn’t easy. There is marketing to think about. The delivery of a slick operation takes a lot of refinement and experience.
All too often landlords answer the conundrum by forgoing the stronger yields that come from a serviced office in favour of low yields and an easy life.
Orega is a company designed to help landlords who are frustrated with this issue. They realise they could boost revenue by running a serviced office, but don’t have the knowledge to do so.
Our model is a partnership. The landlord provides the space and they appoint us to manage the real estate as a serviced office. We take a fee for management and together we share the profits. The upside of this method is considerable.
At every step we bring experience and expertise to ensure the project is handled with the utmost professionalism
A project near Chancery Lane has delivered profits above 40 per cent of normal rental value over five years. This is a pretty typical example. In many cases we deliver higher profits.
Everything we do is transparent. Landlords can audit every project. Our books are open. Our methods are fully explained. It’s why we’ve been thriving since 2000 and why the Alliances Business Centre Network named us Service Operator of the Year, as did the Business Centre Association. We now manage more than a third of a million square feet for landlords.
Here’s how it works:
The landlord or leaseholder funds the property holding costs plus fit-out, which is amortised over the term of the agreement and repaid ahead of any profit share;
Orega designs, plans space and deals with contractor tendering, statutory approvals, as well as project managing fit-out and installation works from existing building condition to completed business centre;
Orega funds and provides the furniture, telephony equipment and IT hardware;
Orega funds and provides the operational staff, sales and marketing staff, media and overall marketing activity required to operate the business centre.
At every step we bring experience and expertise to ensure the project is handled with the utmost professionalism.
Take marketing. It’s one of the keys to making a serviced office a success. We are able to market the space through our developed network of online channels. We also have relationships with international property agents. Inquiries are handled by our local sales team and supported by our central marketing office.
Time and again we’ve proven we know what it takes to fill serviced office space. A landlord going it alone would be starting from scratch and have none of our clout with search engines or contacts with major international businesses.
Before we begin any deal, we conduct financial modelling to flesh out the potential profits based on market values and building-specific costs. Our team will inspect the property to make sure it’s right for the serviced office market. If the site has strong potential, then we’ll work with the landlord to produce an initial ten-year agreement-to-operate contract.
Our long-term strength is how we run the offices. We are masters at it. We provide space to the likes of BP, Barclays, Hitachi and Deloitte. The testimonials we receive from landlords demonstrate how good we are. For example, The Carlyle Group, an investment organisation with assets of $36 billion, says: “We have created two corporate-quality business centres with Orega, who continue to exceed our expectations as a business partner.”
Landlords who work with us can be reassured that the serviced office market is mature and mainstream. Last year the sector generated £6 billion in revenue, employing 35,000 people.
I founded Orega with my business partner Paul Finch to help landlords make the switch to serviced offices, and our portfolio now covers the UK and Europe. Our profit-sharing model means we have to work hard for landlords in order to make each deal work. That’s OK. We know the market inside out. We provide some of the finest serviced offices to companies, from startups to multinationals, hosting more than 2,500 professionals at the last count.
We’d love to work with more landlords. If you have a property, which might be suitable as a serviced office, then get in touch. Hopefully we can show you that there is no dilemma between high yields and convenience. Our approach can give you both.