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 – eg
ethical procurement
• Opportunities to increase awareness for
each tenant

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
broadband
Video conferencing
facility available
Phone 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
Safe
Clean
Well-maintained
Good value
Accessible*
Meeting the needs of
target tenant group
Profit-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 and shared services

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