The demand for flexible office space in the UK has seen a significant increase post-Covid, as businesses adapt to new working norms.
- There has been a 206% increase in enquiries for flexible office space compared to pre-Covid levels, marking a remarkable rise.
- In the first half of 2024, there was a 14% year-on-year increase in demand, driven by the need for larger workspace setups.
- The cost of a private desk in London has increased by 12% year-on-year, reflecting a “flight to quality”.
- New market entrants and expansion of existing operators are boosting the flexible office supply across the UK.
Flexible office specialist Workthere reports a substantial 206% surge in UK enquiries for flexible office spaces compared to pre-Covid times. This rise is indicative of the evolving workplace norms as more companies explore adaptable office solutions.
In the first half of 2024 alone, flexible office space demand grew by 14% year-on-year. Businesses are increasingly seeking larger spaces, specifically those accommodating 20 desks or more, and are venturing into new markets. Notably, requests for such larger spaces constituted 24% of enquiries, doubling from the previous year’s 12%.
Conversely, demand for swing and project spaces has decreased, accounting for only 13% of enquiries in H1 2024, down from 20% in H1 2023. This suggests a shift towards viewing flexible office spaces as long-term solutions rather than temporary fixes.
Reports indicate a significant 12% year-on-year increase in the cost of private desks in London, averaging £805 per desk. This price hike is driven by a ‘flight to quality’, with premium office spaces seeing heightened demand. Meanwhile, prices outside London remain more competitive, at £379 per desk, showing only a slight rise from the previous year.
The growing demand has led to a flurry of new office schemes in London and across the UK, although older office schemes are experiencing reduced occupancy rates. London’s flexible office occupancy slightly declined to 82%, down from 88% in the first half of 2024, and 83% in the rest of the UK, down from 86%.
According to Tom Leahy, Co-Head of Workthere UK, the increased demand underscores the resilience and appeal of the flexible office market, contributing to rising desk prices, especially in top-tier locations.
Operators are passing on inflation-induced cost increases to occupiers, raising desk prices. Despite a slight fall in occupancy, the popularity of flexible office markets persists, with expectations of new projects continuing to unfold across the UK.
Flexible office solutions are becoming integral to business strategies, with the average contract term in H1 2024 extending to 15.6 months, up 27% year-on-year. Companies are increasingly opting for 24-month contracts, signifying the long-term role of flexible workspaces in their operations.
The rising demand and evolving dynamics of the flexible office market illustrate a significant shift in the business landscape.
