Hot Property: Keeping an eye on Contact Centre capacity

BLOG: Contact centres is a thriving sector, with future growth firmly on the horizon. In order to reach those goal, what should management teams consider to ensure ambitions are not curtailed? Wes Erlam looks into the often-forgotten subject of property.

The contact centre industry is thriving, employing more than one million people across the UK. However, businesses are facing a new obstacle in achieving further expansion, with a shortage of quality office space resulting from a lack of new build activity over the last six years.

As demand starts to outstrip supply, it is imperative that businesses with a contact centre operation make informed choices when it comes to selecting new premises, taking a strategic approach to planning their future property needs.

Sourcing the right location

The first priority for contact centres contemplating relocation is to define the parameters of their search area. If the business is looking to attract new staff, it’s important to ensure it is located in an area with a readily-available talent pool and good transport links.

It’s fair to say that the majority, if not all, contact centres fall under B1 use classification. This classification covers the building’s use as office space, for light industry or for research and development purposes.

Finding premises with a use classification as broad as possible could be to your advantage if you sense there might be a potential change to the way in which your business operates. This, however, is unlikely in the case of a contact centre.

Accounting for growth

Finding the right location to house your business can largely depend on the ability to anticipate your needs in the years ahead. It’s very important that businesses commit themselves to appropriate leases which are within their budget and business plan aspirations. But, equally, it’s worth considering premises that provide scope for expansion if the business is expected to grow.

Commercial leases should always contain clauses to deal with a situation whereby a tenant wishes to assign or sub-let a lease. This provides the opportunity to recover rent for space that is no longer being used by your business, or in the case of assignment, enables the tenant to assign their entire lease obligations to a third party.

An alternative to assigning or sub-letting a lease is to negotiate the incorporation of a break clause with the landlord. This is a provision (usually, but not always) that allows the tenant to end the lease on a specific date, subject to certain criteria. It’s worth noting, however, that the inclusion of break clauses in a lease will normally reduce the incentives (such as a rent free period) available to the incoming tenant or will incur a penalty, such as a one-off payment to the landlord, if the break is exercised.

Contact centres should carefully consider how likely it is that they will require a break clause, as they will be in a stronger position to negotiate an incentive package without a break. Assuming a break clause is agreed, these are the dates that businesses should work towards when assessing their occupational requirements, in order to avoid occupying unsuitable, potentially expensive space in the medium to long term.

Wes Erlam

Pictured: Wes Erlam, senior development surveyor at Lingley Mere Business Park. 

Going bespoke

While market vagaries and local business demands largely dictate the availability of commercial premises from region to region, the lack of speculative development over the last few years has seen an increasing shortage of suitable high quality, energy-efficient accommodation for businesses to choose from should they wish to relocate.

This presents a particular problem for contact centre businesses, which can often require larger floor plans to house multiple teams. In cases where businesses still struggle to find premises to suit their requirements, the best option may therefore be to consider design and build (D&B) accommodation.

The advantage of purchasing or leasing space off-plan, is that it enables the occupier to influence the specification and design of the building so it meets their specific needs. In addition, there is a significant time/cost-saving when it comes to ‘fitting out’ the space, as these works can be absorbed into the overall construction programme. This will ensure they acquire the right space in the best location, rather than being forced to take space that is inflexible and inefficient, simply because it is built and available.

It’s worth noting that new builds are designed and constructed to meet high quality environmental specifications, creating office accommodation that is of Grade A standard and often with an associated BREEAM rating of ‘Very Good’ or ‘Excellent’. This sustainability benchmark evaluates a wide variety of scientifically-based criteria, including energy and water use, pollution, transport, waste and management processes. Given the nature of contact centres, which can often operate for 12-plus hours a day to meet service demands, moving into an energy efficient and contemporary building can be a highly effective way of significantly reducing running costs and cutting down on energy consumption, which all help to positively impact on the bottom line.

The vast majority of businesses will look at five, even ten year projections, to map out how the business will look and what is required to help them get there. Property requirements play an integral part in any growth strategy, so it’s essential that management thinks ahead to ensure the future shape of the team and the contact centre operations are not compromised by office space that’s not fit for purpose.

Final thoughts…

It’s all too easy to let the issue of commercial property slip off the agenda, but it’s particularly important that contact centres regularly review their property requirements and lease events. The prospect of leasing, buying or building an office can seem daunting, but it doesn’t have to be. The key is to always think about what your future business needs will be, in relation to your property requirements, and not to lose sight of them by understandably getting caught up in the day job. A little knowledge of the commercial property market, and a degree of forward planning, is all you need to ensure you get the best out of your next property move. By allowing sufficient time to review your property needs, exercise breaks and expiries, and work with a developer, who can guide you through the planning and building process, the better suited your office accommodation will be to your future expansion strategy.

By Wes Erlam, senior development surveyor at Lingley Mere Business Park.    Lingley Mere Business Park, based in Warrington, is a joint venture between United Utilities and Muse Developments.