Managed Office vs Direct Lease: Total Cost of Occupation

The two models

• Direct lease — tenant leases space, pays rent + service charge, funds fit-out capital, exits via lease break or expiry
• Managed office — tenant pays monthly all-inclusive desk rate, no fit-out capital, typically 6–36 month agreements with flexibility

Cost comparison

For a 10,000 sqft occupancy in central London Q1 2026:

Cost	Direct lease	Managed office
Rent (5yr)	£4.5M–£7M	included
Service charge (5yr)	£400k–£800k	included
Rates (5yr)	£1M–£2M	included
CAT B fit-out	£1.2M–£2M	included
Furniture	£180k–£400k	included
Utilities (5yr)	£250k–£500k	included
Cleaning/security (5yr)	£300k–£600k	included
Dilapidations	£200k–£500k	none
Total 5-year	£8M–£13.8M	£12M–£20M (at £400–£700/desk/month × 150 desks)

When managed wins

• Headcount < 50, high growth uncertainty
• Short expected tenancy (1–3 years)
• Cashflow-constrained — capex not available
• Brand fit with coworking aesthetic acceptable

When direct lease wins

• Headcount > 80, stable or slow-growth
• 5+ year expected tenancy
• Brand requires bespoke identity
• Capital available for fit-out
• Long-term cost efficiency prioritised

What we do

For direct-lease occupiers, full fit-out service — see Office Fit-Out, Office Refurbishment. We also deliver spec-up fit-outs for managed-office providers expanding London footprints.

FAQs