UK's flexible office workspace
The UK's office culture is transforming, with the traditional concept of 'office space' evolving into a more fluid and adaptable model. Once characterised by the fixed leases of Central London and major regional cities, the office sector is now embracing flexibility. This metamorphosis, accelerated by the pandemic, has seen the office market adapt to the demands of a modern workforce.
Central London
UK's urban hubs
Central London and key regional cities
This report delves into flexible workspaces across the UK, examining key drivers such as cost per desk, deals per desk, lease lengths and supply in Central London and other significant urban hubs. The report has been written in collaboration with Office Freedom, the world’s first flexible office broker and a renowned name in the industry, enabling deeper
insight and analysis into the sector.
UK's Urban Hubs
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As imposed by the 2021 Environment Act, developments in England from early 2024 will be required to deliver a mandatory 10% Biodiversity Net Gain (BNG), maintained for a period of at least 30 years. BNG is an approach to development and/or land management that seeks to leave the natural environment in a measurably better state. Habitat creation or enhancement can be delivered on-site, off-site or via statutory biodiversity credits, and is calculated using an approved Biodiversity Metric.
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Desk cost dynamics
Top tier cities and towns
Cities and towns beyond London have witnessed shifts in average desk costs, underscoring the rising demand for flexible workspaces in these locales. Reading, Aberdeen, and Cambridge are at the forefront of this trend in 2023.
The Elizabeth Line has extended to Reading, enhancing its accessibility and desirability. Reading recorded a significant uptick in desk costs, with prices climbing from £190 in 2020 to £309 in 2023.
Leasing insights
Lease Terms and Time from Initial Enquiry to Move-in central London
Lease fluctuations:
2021 saw a spike in lease duration compared to the previous year, but by 2023, the figures have realigned closer to the 2020 numbers.
Swift transitions:
The diminishing lead time from signing to moving in is similar to Central London's trend. The time from lead to move-in in the regional cities has decreased from 64 days in 2021 to 55 days in 2023, underscoring the sector's efficiency across the UK compared with traditional leases.
*per desk per month
*desks per deal
*per desk per month
*desks per deal
Conclusions
Central London has witnessed growth in flexible workspace pricing, with areas like St James's, Mayfair, and Shoreditch leading the charge. The significant price surges in these districts from 2020 to 2023 highlight the increasing demand for premium, flexible workspaces.
However, it's essential to note the challenges. While some areas have seen a surge in demand and pricing, others, like Aldgate/Whitechapel and Liverpool Street, have experienced a decline. These fluctuations emphasise the importance of understanding local market dynamics and the factors influencing demand.
The occupier landscape in Central London has remained similar to three years ago, with Financial Services taking a dominant position. The continued demand from those occupiers, suggests that businesses across sectors recognise the benefits of flexible workspaces.
Beyond the capital, other significant cities in the UK are also seeing a marked interest in flexible workspaces. The data indicates that while Central London remains a dominant player given its overall size relative to the regional markets, cities/towns such as Reading, Aberdeen, and Cambridge are carving out their own significant niches in the flexible workspace sector. This suggests a broadening of demand, with regional hubs increasingly becoming focal points for businesses seeking adaptable office solutions.
In the broader context, the pandemic has undeniably acted as a catalyst, accelerating the transition towards flexible workspaces.. As businesses prioritise adaptability, cost-efficiency, and employee well-being, the demand for flexible workspaces is poised to grow further.
Definitions
Definitions
All the data is based on transactional evidence.
Flexible office deals are all private office deals and not coworking or memberships. All three months plus up to 3 years. Size ranges from 1-70 desks.
New centres for serviced means brand new serviced floors or buildings that opened. For managed, they are leased floors that have been turned into managed offerings. Sizes range from 500 sq ft + for managed to 100k plus for serviced buildings.
The Occupier Type analysis is based on around 1000 deals.
Flexible office space providers offer a variety of different types of workspaces, including:
Coworking spaces: Shared workspaces where individuals and small teams can rent desks or private offices on a flexible basis.
Serviced offices: Fully furnished and equipped offices that can be rented short-term or long-term.
Hybrid offices: A combination of coworking spaces and serviced offices, offering businesses the best of both worlds.
Flexible office space providers also offer a range of amenities and services, such as:
High-speed internet
Meeting rooms and event spaces
Printing and photocopying
Business support services
On-site cafés and restaurants
Central London
UK's urban hubs
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Rad Radev
Associate Research Analyst
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Source: Office Freedom, Carter Jonas, CoStar
Source: Office Freedom, Carter Jonas
Average cost per desk in major regional cities
2023
£304
2023
£309
2023
£278
2023
£271
2023
£264
2023
£264
2023
£253
2023
£251
2023
£246
2023
£235
2023
£230
2023
£227
2023
£220
2023
£194
2023
£180
2023
£176
2023
£166
2023
£142
Aberdeen
Glasgow
Edinburgh
Leeds
Manchester
Liverpool
Nottingham
Birmingham
Milton Keynes
Slough
Cambridge
Cardiff
Bristol
Bath
Brighton
Reading
Watford
Newcastle
Milton Keynes
is gaining traction, thanks to its easy commute to London and the recent introduction of new flexible work centres.
Other cities, like Nottingham are emerging as a contender with growth in available flexible workspace, recording a notable growth over the past three years.
Other cities
displayed strong growth, with rates rising
from £200 in 2020 to £304 in 2023.
Aberdeen
In Cambridge, the burgeoning tech scene, coupled with the launch of new flexible work centres, has underpinned its strong
market performance.
Cambridge
Major UK cities have seen the length in both flexible and traditional leases diverge from those in London. The average lease term in days for flexible office space for major cities outside London was similar in 2020 and 2023, with 365 days and 366 days, respectively. Occupiers are increasingly motivated to secure the best spaces for extended periods due to the limited availability in most major cities.
Lease Terms and Time From Lead to Move-in in Key Regional Cities:
Supply in the regional cities
Source: Office Freedom, Carter Jonas, CoStar
Regional towns and cities:
The Big Six regional cities (Manchester, Birmingham, Bristol, Leeds, Glasgow and Edinburgh) accounted for 58% of the total new flexible centres outside of London since 2021.
Emerging hotspots:
Nottingham and Reading have seen a significant uptick in desks per deal in 2023 compared with 2020, suggesting both cities are emerging as new hotspots for flexible workspaces.
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Ollie Lee
Associate
+44 (0)20 3940 9463
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Ed Caines
Head of Landlord Representation
+44 (0)20 7016 0724
Office Freedom
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Bob Toor
Senior Account Director
+44 (0)7507 554 521
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Julian Wogman
Senior Account Director
+44 (0)7904337664
Carter Jonas
Central London has witnessed growth in flexible workspace pricing, with areas like St James's, Mayfair, and Shoreditch leading the charge. The significant price surges in these districts from 2020 to 2023 highlight the increasing demand for premium, flexible workspaces.
However, it's essential to note the challenges. While some areas have seen a surge in demand and pricing, others, like Aldgate/Whitechapel and Liverpool Street, have experienced a decline. These fluctuations emphasise the importance of understanding local market dynamics and the factors influencing demand.
The occupier landscape in Central London has remained similar to three years ago, with Financial Services taking a dominant position. The continued demand from those occupiers, suggests that businesses across sectors recognise the benefits of flexible workspaces.
Beyond the capital, other significant cities in the UK are also seeing a marked interest in flexible workspaces. The data indicates that while Central London remains a dominant player given its overall size relative to the regional markets, cities/towns such as Reading, Aberdeen, and Cambridge are carving out their own significant niches in the flexible workspace sector. This suggests a broadening of demand, with regional hubs increasingly becoming focal points for businesses seeking adaptable office solutions.
In the broader context, the pandemic has undeniably acted as a catalyst, accelerating the transition towards flexible workspaces. As businesses prioritise adaptability, cost-efficiency, and employee well-being, the demand for flexible workspaces is poised to grow further.
Conclusions
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Ollie Lee
Associate
+44 (0)20 3940 9463
Oxford
2023
£293
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Jon Posener
Chief Operating Officer
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Continue reading our report on UK’s flexible office workspace
Continue reading our report on UK’s flexible office workspace