Commercial Office Leases See’s Big Increases
Regus, the rental firm of commercial real estate, has stated that its profits have risen by 25% last year since firms have started renting their properties rather than buying their own business workplaces.
Before tax deduction, the profit of the company reached £150m, a sizeable increase over its previous year proceeds of £120m. The company’s revenues have increased to a total of £1.08bn.
Regus has stated that the increasing preference of companies to rent its premises is due to the current economic crisis since it is normally preferable for their cash flow than buying new real estate. In addition, share prices have increased to 1.8p, up from 1p last year.
Although the business manner of Regus has bought some disapproval in the past due to its business mentality of taking out long term contracts to sublet on shorter term contracts, this has become exceedingly widespread in times of economic depression.
The chief executive of the company has called 2008 another very good year, a fifth consecutive year of great turnover and sees no reason why 2009 should not follow suit.
More businesses are seeking to rent the workspace they need rather than the high and increasing costs involved with buying them. A number of companies have even chosen to sell premises that they previously owned and relocate into rented places instead. The use of a company offering office planning and workplace consultancy can be invaluable at such times.
Asian growth has also been impressive, with 112 new premises opened last year and the number of workstations up to over 150,000. Asian revenues have increased by over 55% with new centres being opened in Pakistan and Taiwan. By contrast, in the UK, revenues have risen by 6.7%
