How Flex Space is Changing the London Office Market
Flex space, otherwise known as flexible office space or workspace, refers to types of offices that have flexible contractual terms. This includes coworking spaces, managed workspace and serviced office spaces.
The number of flex spaces in London has been growing significantly over the last decade, driven largely by digital innovation, changing work practices (such as hybrid working) and economic uncertainty (flexibility is attractive in turbulent times). Flex space used to be a niche segment of the market. But now, flex space makes up a third of property deals in London.
Let’s look at how flex space is changing the London office market in terms of supply and demand, pricing and value, users and benefits, and future trends and opportunities.
Supply and Demand
The number of flex spaces has risen sharply over the last few years as more operators join the market and existing players expand their portfolios. In London, as in many other major global cities, the big flex space brands are WeWork, Regus, and Spaces. The capital also has a variety of independent and niche coworking spaces, such as coworking for tech, wellbeing, and education.
Flexspace enables businesses to be more agile and adaptable in their workplace strategy. The COVID-19 pandemic accelerated the demand for flex space in London, as businesses looked for ways to minimise risk while attracting the talent they required to continue trading and growing.
The pandemic has disrupted traditional working models and given rise to hybrid working. Flexible and scalable office solutions can accommodate hybrid working schedules and align with employee preferences. Contracts tend to be shorter-term, and, conveniently, offices are ready to move into.
Pricing and Value
Office pricing depends on several factors, including location, size, services, and the quality of amenities. According to FreeOfficeFinder’s Flexible Office Pricing Tool, the average price of a private office per person per month in London is £659 as of October 2023. The average price of a coworking desk, meanwhile, is £345 per person per month.
In terms of areas, among the most expensive in Central London are Mayfair (£985 private office desk, £360 coworking desk) and Soho (£928 private office desk, £400 coworking desk). The cheapest are Barbican (£408 private office desk, £350 coworking desk) and Vauxhall (£445 private office desk, £372 coworking desk).
The value of a flexible workspace in London really hinges on the extent to which it meets the business's goals. A flex space has the potential to increase employee wellbeing and productivity, drive down capital expenses (in comparison with leased offices), and attract the best staff and clients.
The all-inclusive monthly price can also help business owners to plan their cash flow better.
Users and Benefits
When flex space started in the 1990s, freelancers and small startups tended to occupy them while larger and more established businesses worked in traditional leased offices. That has all changed in recent years – nowadays, a diverse range of businesses call flex space home.
Flex spaces are also utilised by a variety of industries, such as technology, finance, media, education, healthcare and legal. Some organisations choose them as a HQ, whereas others use them for short-term project teams or to test a new market or idea before they kickstart their expansion plans.
There are various benefits of using flex space in London, the most common include:
• Less commuting – you'll find flex spaces all over London, including in the suburbs.
• Flexible occupancy – you can rent a flex space on a part-time basis, and some have 24/7 access.
• Brand image – a well-equipped and rated flex space can boost your brand and provide credibility.
• Access to resources – flex spaces come with facilities, amenities, and opportunities aplenty.
• Networking and learning – many flex spaces are home to a diverse community and run regular networking events.
Future Trends and Opportunities
The future of flex space in London is bright.
As businesses continue to recover from the impact of the pandemic and deal with the UK’s economic challenges, flex space provides a viable option for large and small businesses alike. Experts predict that thirty per cent of all office space worldwide will be flexible by 2030, and large corporate occupiers will be driving a significant portion of the demand.
Here’s what’s in store for flexible workspace in London, and the UK in general:
• More choice - Hybrid models that mix flex space with remote work.
• Better differentiation - Niche flex spaces geared towards specific industries, sectors, or demographics.
• A focus on sustainability - Flex spaces that prioritise and promote environmental and social responsibility.
Ultimately, flex space is shaping the London business landscape in a variety of ways.
Higher supply and demand, value for money and exceptional benefits are helping businesses to thrive and grow. Far from a temporary fix, flex space has become a long-term office space solution for London businesses – one that complements hybrid working and facilitates future growth.
