Co-location and shared services

www.ethicalproperty.co.uk

Co-location, Co-location, Co-location

Emma Tracy – Sales and Development Manager,The Ethical Property Company

What this session is covering

• How to approach the office search

• Would Co-location meet your Organisation’s needs?

• What level of shared services do you need?


Finding a new home for your Organisation

• What do you need from your premises?• Budget – not just rent, but associated costs such as business rates,

utilities, office cleaning, ICT• Size - and the potential to expand or contract over the period of the

lease• Location – for clients, for donors, for staff. High street presence, or

car parking required?• Price vs Respectability


Conventional Leases vs Serviced Offices

The typical conventional lease • A minimum of 1,500 ft2 (suitable for around 20 desks) • In “shell” condition• Minimum lease term of 5 years, sometimes with a break clause on the

3rd anniversary

• Tenants have the flexibility to fit out the space according to their needs • Tenants have control over branding, design and furnishing – allowing

their premises to reflect their business personality• Tenants have responsibility for choosing telecoms supplier, ISP and most

other services


Conventional Leases vs Serviced Offices

Serviced offices offer • All inclusive fully furnished solution with

• telecoms• internet • power

• Flexible, short-term licence agreements with regular break clauses

• The tenant loses some control over their space but in return gains convenience and flexibility.


Is a conventional lease suitable for your organisation?

• Does your organisation have guaranteed income for the next 3-5 years?

• Are you planning to expand in the next 3-5 years?

• Are you likely to increase or decrease the number of people you employ?

• How quickly do you need to move in?

• How flexible is your core funding?


Benefits of Shared offices

• Flexibility in terms of the length of your agreement (typically break clauses

within the lease/licence)

• Flexibility to expand or contract

• Simpler legal arrangements, which means that the move can be quicker

and less costly, with all services available immediately

• Avoid upfront costs, with the exception of the deposit!


Why Co-locate with other charities?

To save money

• Achieve economies of scale

• Share facilities that are unaffordable otherwise

• Benefit from communal facilities


Synergy

• Networking with organisations in the same field

• Collaboration opportunities

• One stop-shop for clients

• Setting the agenda for the building

Setting the Agenda –being a Values-driven building

Or another way …

The Ethical Property Company was established in 1998 as a social business, and now has 17 owned centres and manages a further 7, across the UK.

We have always seen a benefit to tenants in being located in the same building. This can be broken down into several areas:

• Shared facilities and management• Shared resources• Shared information• Shared back room operations• Working collaboration• Higher Profile


What are shared facilities and management?

• Meeting rooms

• Kitchens

• Reception and Receptionist

• Broadband and phone lines

• Storage

• On site facilities management


Tenants meeting rooms

Benefits

Tenants do not need to rent permanent meeting space which they use intermittently. Costs apportioned on basis of office area occupied.

Costs

Generally very little but system needs policing to ensure ‘fair usage’


Break-out space/gardens/kitchens

Benefits

Tenants do not need to rent their own space or create tea-points. Opportunities for networking between tenants. Costs apportioned on basis of office area occupied.

Costs

Generally very little but tendency to the ‘tragedy of the commons’


What are back room operations?

• Office cleaning

• Green procurement

• Fair trade procurement

• Security

• HR services

• Book-keeping and other financial

services


Data and telephony

Benefits

Smaller tenants from our target group can get low-cost access to relatively fast broadband and low cost bulk-bought call charges.

Costs

Tenants with heavy demands on broadband find shared access frustrating and create pressure to upgrade, increasing costs for all.


Shared Information and Resources

• Printer

• Franking Machine

• Building-wide meetings – on fundraising, on social networking, on changes in HR or legal practices, first aid training

• Social activities – presenting your work at themed lunches

• Staff benefits – bike surgeries, yoga classes

• Establish online fora


‘Tenant Resources’

Benefits

Bulletin Board for tenants, room bookings, repository for property-related

guidance. Linked to booking system so that Fair Use can be imposed, if

necessary.

Costs

Management of the Intranet


Centre Management Groups

Benefits

Opportunity for tenants to discuss issues of common interest, propose

improvements to the building and our practices, get to know each other and

develop synergetic activities.

Costs

Can be abused as an opportunity to moan!


Collaboration

• Creating a one-stop shop for your clients

• Opportunity to apply for funds

• Set the agenda for the building – egethical procurement

• Opportunities to increase awareness for each tenant


Synergy

Things to look out for:

• Registered charities received 80% discount on business rates (currently) –social enterprises/ CICS do not

• VAT – most charities cannot reclaim VAT on office premises being used as administrative bases

• It is unlikely that 2 separate charities can jointly sign the same lease, so this may lead to a sub-letting arrangement

• Sharing the same office – noise, temperature and smells!


Ethical Property – what do we do

Ethical Property promotes a more just, equitable and sustainable society through:

• The provision of property and support services

• The advocacy of our Triple Bottom Line model

• The provision of an ethical investment opportunity


What does that mean for our stakeholders

• Offer fair rent, flexible leases, supportive management

• 80% of tenants believe being in our buildings supports achievement of their objectives

• Clear ethical criteria for our eligible tenants

• Values inscribed in ‘Quintessentials’


Defining types of ‘ethical properties’ - work in progress…


Receptionists

Intentionally-designed, high quality refurbishment

Deep green (100% renewable tariff, energy-saving equipment, on-site generation, recycled materials)

High speed broadbandVideo conferencing facility availablePhone system

High levels of communal space

Best practice for accessibility as standard (automated doors, Braille signs, etc)

Fully-serviced offices, including cleaning and communal phone and IT service

Networked colour copier / printer / scanner

SafeCleanWell-maintainedGood valueAccessible*Meeting the needs of

target tenant groupProfit-making

Lift access, hearing loops as standard

Reception area, unstaffed

Regular PM visits

Mid-level refurbishment

Communal meeting room(s)

Some communal IT services

Some services are opt-in (e.g. communal printer)

Core

Options

Staff team on site

Hasting House – www.ethicalproperty.co.uk/HastingsHouse

• Located behind Queen Street Station• Professional office space• Fully accessible building, with disabled

facilities and lift access on each floor• High speed broadband (50 mbps) and

VOIP phone system• Fully serviced package, including

office cleaning, waste, recycling, fire and security provision

• Communal kitchens and meeting room

• Flexible lease of 5 years, with a tenant-only break clause


Conclusions

• For smaller charities, shared services allows for some economies of scale and access to higher quality products and services that budgets normally allow

• For a larger charity, with security of funds and stable staffing, co-location could allow that charity to act as a social landlord

• Co-location allows charities, both large and small, to help set a values-driven agenda for building management

• With determination and drive, co-location can create a focal point for charitable activity around a theme, a client-group or community



Co-location, Co-location, Co-location

Emma Tracy – Sales and Development Manager,The Ethical Property Company

Co-location and shared services

Government & Nonprofit

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