London and China are key target markets for Forsyth

SERVICED office accommodation group Forsyth Business Centres plans to expand its operations in London and the Far East after more than doubling in size over the last two years.

The York-based company, which grew from 11 to 23 centres, is part of Kevin McCabe's global property and leisure empire Scarborough Group International.

It provides businesses with a variety of facilities ranging from office accommodation, meeting rooms, reception services, telephony, mailing addresses and secretarial support.

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Last year, turnover increased by 26 per cent, from 5m to 6.3m, and losses, due to old lease liabilities, reduced from 2m to 1.3m.

Finance director David Harrop said: "When the business was set up in 1991 its role was to support the core property business of Scarborough Group and encourage tenants. But it had some old lease liabilities, which are quite uncompetitive for the current market.

"In the last two years we have set up an independent management team for Forsyth and now we only go into buildings that make sense for us.

"We are moving from loss to profit and continuing to grow the business."

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The diversification into management contracts has allowed Forsyth to move into new locations across the country.

Last year it signed a new 10-year lease on its office complex in Euston, London and Mr Harrop said the capital remained a key growth area for the company. He said: "We had to fight to maintain occupancy in 2008-9 but demand strengthened in 2010.

"Two-thirds of the national serviced office market is in London, which is a big growth area for us. The rates you can charge and the level of demand is completely different to anywhere else in the country."

The company is also seeking further growth in China, where it already has two centres, and the Far East. "The existing centres have gone very well," Mr Harrop said. He added: "As a company, we are pretty opportunistic and are constantly looking for deals and commercial opportunities, particularly in these areas. We haven't got a specific target in mind and we wouldn't rule out buying buildings."

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The company, which employs 50 staff across its centres, has clients ranging from big multinationals to start-up businesses, including, Amey, Network Rail, Mace, Leeds University, and Rensburg Sheppards. Last week it signed deals for 24 new client work stations in Yorkshire.

Mr Harrop said: "The serviced office market has held up pretty well in the recession and we have been able to grow quite rapidly

"The way in which people work has become much more flexible. People travel a lot with work and people don't necessarily get based in the same location for five days a week."

He added: "On the bad side, there has been more price competition in the market during the recession. Some of our competitors have been driving prices down and flooding space on to the market.

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"Our revenue-per-desk dropped during the recession but it's important not to get obsessed with competing on price. Because our occupancy is holding up pretty well, and going up across the board, we don't need to do deals at any rate."

Part of a global property empire

Established in 1991, Forsyth Business Centres provides fully furnished office space for businesses on flexible occupancy terms to avoid long-term leases.

The firm, which is headquartered in York, is part of Kevin McCabe's global property and leisure empire Scarborough Group International and has 23 centres in the UK and another two in China.

In the Yorkshire region, the company operates two centres in Leeds and four in Sheffield as well as other centres in York, Harrogate and Scarborough.

In addition to office space, Forsyth also provides administrative and infrastructure backup including telephone answering, virtual offices, meeting rooms and secretarial services.