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35% of office deals in London involve operators of flexible workspace

Research conducted by The Instant Group has shown that 35% of office deals in the last 12 months involved operators of flex workspace. There is now more demand for alternative delivery methods as corporate occupiers switch to more agile models of workspace delivery. 

01/02/2020 2 min read
WeWork, Coeur Marais – Common Areas

The research shows that by 2023, 12.5% of commercial real estate will be in flexible workspace. As more traditional landlords realise the need to diversify, 83% of flexible spaces in the UK are now owned by smaller, niche operators, compared to just 17% from bigger brand names.

John Duckworth, Managing Director UK & EMEA at The Instant Group comments: “For the last five years, the size of flex requirements has increased as 25+ and 50+ desk deals have grown faster than the coworking membership element of the market with 45% of the FTSE 100 procuring space via InstantOffices.com over that time.

“These larger corporate deals now make up a greater proportion of flex space demand than at any time previously and have increased significantly since the BREXIT vote and the long period of uncertainty that has prevailed since. Flex space is now a fast, agile route to market for companies of all sizes, and its adoption will only increase as larger organisations work flex options into their processes.

“With large, blue-chip clients predicting that 35 to 40 per cent of their portfolios will/  consist of flex options in the future, there will be phenomenal enterprise-level demand to drive future growth. The maturation of supply and economic attraction to these models will also further push this market success.

“With more corporates adopting flex space, diversification in the market, decreasing desk rates and greater franchising in the sector, 2020 looks set to be a prosperous year for the flexible market. The impact on the flex market has been pronounced with demand growing to record levels as clients choose alternative solutions.”

Highlights of the UK Market Summary

  • Flex space made up 35% of commercial property transactions in the last 12 months
  • The number of flex space centres in the UK is now at 6,075 – an increase of 7% in the last six months
  • There is now more sub-5000 sq ft of leased space available on the market than at any time since 2009
  • Demand for 25+ desk requirements for flex space has increased by 25 per cent in the Capital and 35 per cent throughout the rest of the UK
  • Despite the additional demand, market penetration of flexible workspace vs conventional space is still relatively small at just 4% of total office supply

 

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