UK: Grosvenor plans to expand its new coworking brand 25 EP if all goes well with the first location.
25 EP, whose first location was opened in a 30,000 square foot space in London’s Eccleston Yards this year, has announced plans to open another flexible coworking space of a similar size by the end of 2022.
Charles Howard, director of offices at Grosvenor Britain and Ireland, said: “If 25 EP demonstrates that it’s successful, we look to scale that across the estate – in Belgravia and Mayfair. These places and these operations only work in certain buildings, but I would expect us to open another in 2022 at a similar size, so between 25,000 square feet and 30,000 square feet.”
25 EP was opened after the closure of Central Working, which held the space before Grosvenor. The failure of Central Working has led some to doubt 25 EP’s success, but Grosvenor, who is also the landlord of the property, feels confident that the coworking space will be a success.
Howard said: “The difference is we own the building. The real estate industry has a very short memory as to what happens in a property cycle when you have operators of serviced offices bound by lease provisions to a landlord. When rents fall, suddenly the coworking and serviced office space follows. They have an obligation to pay rent, which may not be covered by the appropriate level of profit they’re making from the sales of memberships. So, you then see in the press a number of operators who fold leases where those centres are just not profitable anymore. As an owner of real estate, you can work with that market fluctuation because you haven’t got the obligation of paying rent to yourself, so as long as you’re comfortable with the slightly more volatile profile of the income, then actually as a longer-term proposition it’s a much better operation. You’re cutting out the middleman.”
