1. The Spelthorne Business Hub
1.1 The Spelthorne Business Hub, initially named the Incubator, opened in August 2021 during the pandemic. The Hub has 20 offices across two floors, a co-working space with 12 desks, a training room and 3 meeting rooms.
1.2 Since the Hub opened, 47 businesses have occupied the office space, and 91 businesses have taken up the hot desking space. This represents just 1.84% of the business base in Spelthorne.
1.3 The Hub’s objective is to provide dynamic incubation space for start-ups and pre-starts. It offers a vibrant co-working office space with below market rates, flexible terms, and outstanding business support.
1.4 A Cabinet report dated 24 February 2021, it is noted that the incubator was to support businesses with an objective to maximise revenues and there was confidence that, “the incubator is not only likely to be self-sufficient but could also potentially provide a small revenue stream which could further sustain additional economic support for businesses” which was achieved in the current location in 2024-25.
2. The benefits of sustaining a business hub in the borough.
There are many benefits in being a tenant in the Hub which is unique in Spelthorne.
a. A vibrant community of start-up businesses providing opportunities to network and build valuable business contacts and leads.
b. Coaching, mentoring, and training programmes provided by local business coaches and through our partnerships.
c. A regular programme of seminars and workshops focussed on the topics which are important to businesses.
d. Membership of the Spelthorne Business Forum which provides businesses with up-to-date local business news. Access to their events and networking opportunities, plus promotion of your business through the online directory show-cased on their site.
e. A lower, subsidised rental model is in place to help start-ups and new businesses financially while they become established. After a period, businesses are asked to move on when financially viable.
f. The Council’s support of businesses, in turn supports residents by promoting jobs and prosperity.
3. 4 Year overview
3.1
2021 – 2022.
The ground floor of Summit House became the Spelthorne Business Hub
in August 2021 after an approximate Council investment of
£85,000 to fit-it out the space. As it was in the middle of
the Covid pandemic it is not surprising that occupancy levels were
initially low at 17%. CoTribe were awarded the concession contract
in September 2021 for 5 years.
All income mentioned in this report is split 60% - 40% due to the
concession given to CoTribe. CoTribe started marketing the Hub from
November 2021. Income was achieved from a customer base of 6.
Leatherick Ltd moved in in Sept 2021 and are still in occupancy.
The income budget was set at £29,000 which was clearly over
cautious.
3.2
2022 – 2023.
The Income budget was set at £43,500 and actual income
achieved was £49,000. The surplus figure of £31,500 is
somewhat skewed as Assets were likely to have picked up the
utilities and building/ facility costs.
3.3
2023 – 2024.
Income increased by 72.5% as part of the 1st floor became available
for rent. The S106 contribution from Shepperton Studios of
£20,000 was received, this is part of a total contribution of
£100,000 over 5 years. Occupancy also increased by 32.5% on
the ground floor and the Hub achieved 67% on the first floor.
Expenditure included utilities and building/ facility costs hence a
deficit of £7,000.
3.4
2024 – 2025.
Using some UK Shared Prosperity Fund monies, we were able to
convert the remaining areas of the 1st floor into office space.
This resulted in record income showing a healthy surplus and good
occupancy levels. 39 individual co-working and 28 office
customers.
3.5 Occupancy levels
2024-25 occupancy levels were affected by the loss of a tenant who occupied ground floor room 1 for most of 23-24 and 24-25. It has been difficult to re-let it due to its size and was due to be split into two smaller units which has now been cancelled. We have moved a client from Floor 1 to room 1 and are negotiating with a new occupier.
Figure 3 - Occupancy Levels 2021-25
3.6 Feedback from the current tenants
Initial feedback from 50% of the existing hub tenants have expressed an interest in moving to Communications House (if the committee were to agree to relocation rather than closure). The remaining tenants will be consulted to ensure that a high percentage will agree to move. The Economic Development Manager has spent time with each tenant to discuss moving options and allow them time to digest and ask questions.
3.7 Financial overview 2021-25 [CT1]
|
21-22 |
22-23 |
23-24 |
24-25 |
Total |
|
|
|
£ |
£ |
£ |
£ |
£ |
|
Expenditure |
|
|
|
|
|
|
Buildings |
88,000 |
16,000 |
81,000 |
78,000 |
263,000 |
|
Supplies/ Services |
18,000 |
1,500 |
10,500 |
14,000 |
44,000 |
|
Total Expenses |
106,000 |
17,500 |
91,500 |
92,000 |
307,000 |
|
Income |
|
|
|
|
|
|
Office |
(4,000) |
(44,000) |
(54,000) |
(77,000) |
(179,000) |
|
Co-working desks |
(1000) |
(5,000) |
(10,000) |
(16,000) |
(32,000) |
|
Other |
- |
- |
(20,000) |
(28,000) |
(48,000) |
|
Total Income |
(5,000) |
(49,000) |
(84,000) |
(121,000) |
(259,000) |
|
Total deficit/ surplus |
101,000 |
(31,500) |
7,000 |
(29,000) |
48,000 |
3.8 Occupancy 2021-2025
|
Ground Floor |
21-22 |
22-23 |
23-24 |
24-25 |
Total |
|
Room 1 |
67% |
92% |
75% |
50% |
71% |
|
Room 2 |
58% |
83% |
92% |
50% |
71% |
|
Room 3 |
8% |
92% |
100% |
50% |
63% |
|
Room 4 |
17% |
58% |
100% |
100% |
69% |
|
Room 5 |
0% |
17% |
92% |
92% |
50% |
|
Room 6 |
0% |
8% |
75% |
92% |
44% |
|
Room 7 |
0% |
58% |
100% |
100% |
65% |
|
Room 8 |
0% |
100% |
100% |
100% |
75% |
|
Room 9 |
0% |
100% |
75% |
100% |
69% |
|
Total |
17% |
68% |
90% |
81% |
64% |
|
1st Floor |
21-22 |
22-23 |
23-24 |
24-25 |
Total |
|
Room 1 |
86% |
92% |
89% |
||
|
Room 2 |
57% |
92% |
74% |
||
|
Room 3 |
57% |
83% |
70% |
||
|
Room 4 |
86% |
100% |
93% |
||
|
Room 5 |
71% |
100% |
86% |
||
|
Room 6 |
57% |
100% |
79% |
||
|
Room 7 |
57% |
67% |
62% |
||
|
Room 8 |
50% |
50% |
|||
|
Room 9 |
58% |
58% |
|||
|
Room 10 |
67% |
67% |
|||
|
Room 11 |
33% |
33% |
|||
|
Room 12 |
33% |
33% |
|||
|
Total |
67% |
73% |
70% |
||
|
Occupancy |
17% |
68% |
79% |
77% |
67% |
3.9 Supported businesses and churn (the turnover of customers).
The Hub’s operating model and concession contract have hindered running the Hub as an incubator. Businesses should only receive support until they are able to move on to commercial office space. This would free up space for new start-ups or small businesses to benefit from the subsidised rents. This would result in lower occupancy levels and high churn rates.
The concession contract included conditions which have not been delivered by CoTribe. The wrap-around support and mentorship service did not come to fruition. In 2023, we used some Shared Prosperity Fund to deliver the business support.
Therefore, two factors have influenced performance:
1. CoTribe have a revenue sharing agreement, therefore have strived to deliver as high an occupancy level as possible with a target of a serviced office rental rate for £40/sqft. This results in little churn and a high percentage of customers benefiting from low rents.
2. Nearly all of the businesses who have rented an office do not require much in the way of business support. The types of businesses currently occupying space are:
i) Accountants
ii) Media companies
iii) 2 care home suppliers
iv) A carbon off-setting business
v) A roofing company
vi) An engineering raining company
vii) Recruitment company
viii) An electrician
ix) A Fire Risk specialist.
x) A leather goods business
It would be preferable to have helped many more businesses, but the balance between having a management company to manage tenants and provide support versus the income agreement in place has made this challenging. The Council’s criteria of helping as many start-ups and small businesses as possible receiving support in terms of subsidised office space has not been realised.
3.10 4-year breakdown of expenditure and income[CT2]
|
Spelthorne Business Hub |
Actual |
Actual |
Actual |
Actual |
TOTALS |
|
21-22 |
22-23 |
23-24 |
24-25 |
21-25 |
|
|
£ |
£ |
£ |
£ |
£ |
|
|
RUNNING EXPENSES - BUILDINGS |
|||||
|
SC Building Works |
|
|
|
13,951 |
13,951 |
|
Electrical works |
|
|
|
1,648 |
1,648 |
|
Air Conditioning |
206 |
|
|
- |
206 |
|
Building Works |
80,205 |
(4,839) |
- |
19,928 |
95,294 |
|
Electricity |
|
|
61,084 |
25,000 |
86,084 |
|
Gas |
|
|
9,834 |
6,885 |
16,719 |
|
Management fees |
|
10,804 |
- |
- |
10,804 |
|
Water charges |
|
|
1,545 |
2,500 |
4,045 |
|
Fixtures & Fittings |
3,523 |
3,839 |
570 |
- |
7,932 |
|
Cleaning Materials |
527 |
145 |
- |
622 |
1,294 |
|
Window cleaning |
455 |
660 |
895 |
665 |
2,675 |
|
Trade Waste Collection |
|
195 |
423 |
- |
618 |
|
Contract cleaning |
|
|
1,692 |
2,494 |
4,186 |
|
Collection of Rubbish |
1,096 |
1,611 |
982 |
3,911 |
7,600 |
|
Cleaning General |
1,711 |
3,701 |
3,899 |
480 |
9,791 |
|
|
87,723 |
16,116 |
80,924 |
78,083 |
262,846 |
|
RUNNING EXPENSES - SUPPLIES/SERVICES |
|||||
|
Operational Equipment |
1,560 |
- |
- |
200 |
1,760 |
|
Op Equip mats |
|
|
|
413 |
413 |
|
Kitchen & Canteen Equipment |
|
|
|
6 |
6 |
|
Office Equipment Purchase |
|
|
|
363 |
363 |
|
Office Equipment Supplies |
|
|
|
85 |
85 |
|
Office Furniture Purchase |
|
|
150 |
61 |
211 |
|
Printers consumables |
|
|
- |
64 |
64 |
|
Food purchases |
|
|
|
1,471 |
1,471 |
|
Catering supplies - non food |
|
|
|
57 |
57 |
|
Tea trolley provisions |
|
|
400 |
105 |
505 |
|
Printing Artwork & Design |
3,360 |
|
- |
- |
3,360 |
|
Office stationery |
|
|
|
29 |
29 |
|
Consultant Fees |
249 |
|
- |
|
249 |
|
TV License |
|
|
- |
170 |
170 |
|
Networking |
5,660 |
1,350 |
9,033 |
8,656 |
24,699 |
|
Subsistence-food expenses |
779 |
|
- |
|
779 |
|
Subscriptions General |
|
|
159 |
|
159 |
|
Marketing |
350 |
|
- |
|
350 |
|
Transaction costs |
|
|
|
2,114 |
2,114 |
|
Other Misc Expenses |
6,330 |
55 |
726 |
37 |
7,148 |
|
|
18,289 |
1,405 |
10,467 |
13,828 |
43,989 |
|
TOTAL EXPENDITURE |
106,012 |
17,521 |
91,391 |
91,911 |
306,836 |
|
INCOME |
|||||
|
Other reimbursements |
|
(20,000) |
(28,000) |
(48,000) |
|
|
Incubator Desk Hire |
(755) |
|
- |
(15,818) |
(16,572) |
|
Incubator Office Hire |
(4,199) |
(48,766) |
(64,140) |
(76,869) |
(193,975) |
|
Grant - UKSPF for refurb |
|
|
|
(13,386) |
(13,386) |
|
TOTAL INCOME |
(4,954) |
(48,766) |
(84,140) |
(134,073) |
(271,933) |
|
NET (SURPLUS) / DEFICIT |
101,058 |
(31,245) |
7,251 |
(42,161) |
34,903 |