Demand for flexible office space has seen a significant increase post-Covid, with enquiries in the UK rising 206% compared to pre-pandemic levels.
- Year-on-year, the first half of 2024 observed a 14% rise in enquiries, highlighting growing interest in flexible workplace solutions.
- Larger workplaces, particularly those with 20 or more desks, have become more popular, comprising 24% of enquiries, up from 12% year-on-year.
- In contrast, the need for swing and project spaces has lessened, indicating a shift towards long-term flexible office solutions.
- Average desk costs in London have climbed to £805, driven by a strong demand for high-quality spaces.
The demand for flexible office space has shown a remarkable upturn, with UK enquiries rising by 206% compared to levels before the Covid-19 pandemic. This notable surge is reflective of a broader shift in workplace preferences as businesses adapt to evolving operational needs.
Analysis indicates that the first half of 2024 saw a 14% increase in such enquiries on a year-on-year basis, underscoring a sustained interest in flexible office solutions. This trend is particularly pronounced among companies seeking larger workplace environments, as evidenced by the fact that 24% of enquiries in this period were for spaces of 20 desks or more, compared to just 12% in the previous year.
Conversely, the demand for swing and project spaces has diminished, comprising only 13% of enquiries, down from 20% in the first half of 2023. This change suggests that more organisations are turning to flexible office arrangements as a long-term strategic solution rather than temporary fixes.
Across the market, the cost of private desks in London’s flexible office sector has risen to £805, marking a 12% increase year-on-year. This rise is primarily driven by a ‘flight to quality,’ wherein the upper segment of the market exerts upward pressure on pricing. Outside of London, the average price per private desk is a more modest £379, slightly higher than figures from the first half of 2023.
The market expansion is further exemplified by a series of new schemes introduced in London, with additional projects underway across the UK. However, while these new schemes have bolstered overall rental growth, older provisions have seen a dip in occupancy, impacting the market average. In London, occupancy rates have decreased from 88% to 82%, while the rest of the UK has seen a decline from 86% to 83%.
According to Tom Leahy, Co-Head of Workthere UK, this burgeoning demand underscores the resilience and growing appeal of the flexible office market, which continues to attract businesses despite an increasing polarisation favouring premium spaces. As Leahy notes, ‘The strong increase in demand…is testament to the resilience that the flex market has shown over the last few years.’
Operators across the UK are also grappling with inflation-driven cost pressures, which are being transferred to occupiers, further elevating desk prices. Interestingly, the average contract term length has expanded to 15.6 months in the first half of 2024, a 27% rise year-on-year, indicating that businesses now view flexible office solutions as a crucial component of their operational strategy.
The upward trend in flexible office space demand highlights a profound shift towards long-term strategic solutions in the business environment.
