Office Space News
Avanta Reports Improving Demand for Serviced Office Space
Published November 9th, 2009 by Jennifer LeClaire
Avanta Managed Offices is pointing to early signs of improvement in demand for serviced office space in London. Although Avanta only has its own revenues as backup, the story is compelling and should encourage the worldwide executive office suites industry of brighter days ahead.
David Albert, Avanta’s managing director, says the company’s business in London has remained “remarkably robust” despite the general economic challenges of the past 12 months. Specifically, Avanta’s year-over-year revenue was up 27.5 percent in the quarter ended March 2009. Year-over-year EBITDA was up £6.7 million. That’s impressive in a down economy and points to a slight shift in workspace strategies from companies large and small.
“Since year end, occupancies have improved and enquiry levels are up across the board. We are trading ahead of plan and demand is strong,” Albert says. “Our focus on delivering high quality service has meant that renewals are well above average and we are grateful for the continued commitment of both our clients and staff. We are also encouraged by the fact that the last quarter has seen positive movement in workstation rates.”
Although it is too early to predict long-term growth, Albert says Avanta’s continued
high levels of occupancy, increasing demand and early signs of rate growth are welcome and are testament to the strength of its business – and bode well for the future.
Avanta continues to grow its business during the prolonged global downturn, taking over existing business centers in Mayfair and Edinburgh. Avanta also has a pipeline of new projects in London. The one weak point: Mumbai, India.
“Whilst the UK market remains robust, the company has decided to close operations in its two Mumbai business centers,” Albert says. “Both centers have healthy occupancy levels, having opened before the market downturn in 2008; however workstation rates have proven insufficient to break even based on the inflated rents demanded by landlords.”
As Albert sees it, the situation in New Delhi is more positive. Avanta plans to retain the and Statesman House business center as part of our portfolio. The company is working closely with all clients and staff in its Mumbai centers to ensure a smooth transition across to the building owners or new operators.
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Bill Brookshire November 9th, 2009 at 10:39 am
Glad to see Avanta is still performing well. This is definitely a good sign for the industry. I was curious about the Mumbai closures. I wonder if other serviced office brands there are also closing up shop, or if it’s just too much too soon and Avanta decided to cut its losses rather than wait it out. That is very interesting from an international executive suites industry perspective.
Elizabeth Sanchez November 9th, 2009 at 10:52 am
It looks like the UK market is strong for serviced offices. The US market is strong also. Whereas other areas of the world aren’t keeping that pace. It makes sense, seeing as these are two of the most industrialized nations, that we’d see more serviced office uptake in Europe and America. This executive suites concept is still penetrating other foreign markets.