Newsletter Q3 2017 UK

Newsletter Q3 2017

Between Q3 2014 and Q1 2016, US office landlords rented out shared office workplaces covering more than 1.2 million sqm in total, in shared office facilities of 7,000+ sqm. And the trend is growing stronger. Most rental properties are Class A or Class B properties, comparable to properties we label prime (but not top-quality) and of superior secondary quality and location. We have no knowledge of any equivalent data on shared workplaces in Denmark. Danish trends However, neither multi-user properties nor office hotels are novel concepts in the Danish office market. Regus opened the first of its 16 office hotels in Denmark back in 1998, and NCC has over some years established 14 nationwide shared office facilities under the NCC Company House brand. With the stronger focus on sharing and access via rental platforms such as Airbnb, we are witnessing a tendency towards increased supply and demand for office hotels and shared workplaces/offices, targeting new company start-ups and others. This also ties in with the fact that the number of Danish businesses increased by more than 20% in 2012- 2016 in terms of CVR registrations with the Danish Business Authority. We frequently encounter new, small companies that want to set up business in multi-user properties where it is possible to create a vibrant environment with communities cutting across company boundaries. An increasing number of businesses have easier direct access to letting/sub-letting surplus capacity through various letting portals. In addition, recent years have seen the entry of multiple enterprises that rent out office workplaces/shared offices to other businesses in office buildings where they are often already themselves sitting ten- ants in the leases offered to let.

The sharing economy from a developer perspective Developers of residential properties in major Danish university and college cities strive to develop sharing-friendly student housing. This may improve the lettability of the dwellings, at the same time making it possible for the individual student to rent a larger and better dwelling by means of sharing. In more traditional shared offices, however, the sharing-economy concept may also be taken one step further. In the newly completed office building of Pakhusene in eastern Aarhus (Aarhus Ø), the tenants share communal space in the building, like numerous other office communities across the country, and the costs relating to the operation of this space are shared. Furthermore, however, after hours the kitchen and canteen facilities are let to the canteen operator. The ‘additional’ tenant uses the facilities as a take-away restaurant and venue for various events, and longer term as a pop-up restaurant on certain days of the week. As a result, the landlord secures additional rental income on the communal space in the building, while the restaurant operator profits from the fact that the rent is much lower than the rent commanded by ‘ordinary’ restaurant leases of comparable quality. The parking spaces of Pakhusene are reserved for the building’s office tenants within office hours, but outside hours they will become available to

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