LISTEN: Serviced offices could be worth £126bn by 2025 instead of £62bn, if valued as their own asset class, according to a new report.
The study, by think tank Capital Economics and property academics Michael White of Nottingham Trent University and Neil Dunse of Heriot-Watt University, has been commissioned by Office Space in Town.
It argues that serviced offices are undervalued by up to 20% and need a market-specific valuation framework.
White, professor of real estate economics, said that without a definitive guide to valuation, the strength of the market risked being overlooked.
The RICs Red Book, a guide for valuation professionals, does not at present provide specific advice for serviced offices.
Giles Fuchs, co-founder and chief executive of Office Space in Town, said: “With more and more businesses seeking flexible and dynamic office space, the exponential growth of the serviced office sector is unsurprising, as is the fact that the valuation of serviced offices is being hotly debated.
“With the UK as world leader within the sector, we are proud that London is the centre of this important industry dialogue and the framework that we have proposed within this report is the result of collaboration between experienced industry experts.
“With strong growth expected in the next decade and continued interest from institutional investors, the accurate valuation of serviced offices will become ever more significant and important,” he said.
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