Central London saw flexible workspaces snag a record 2.5m sq ft of lettings last year, equivalent to over 20% of all commercial office leases in the UK capital. The average rent paid by flexible workspace providers across London also spiked to £65.50 per sq ft, a 10% increase on the previous year, according to Cushman & Wakefield.
London is now the global leader for flexible workplaces, easily outpacing New York in terms of both space and number of operations. Since 2012, flexible workplace leasing has represented an average of 2.9% of the market in Manhattan, compared to 10.6% in London.
WeWork has been the largest taker of space in the capital over the past five years, with 2.6m sq ft of space since 2012. This places it ahead of Google, Amazon, Deutsche Bank and rival flexible office provider The Office Group. In fact, such is its expansion that WeWork now has the largest volume of office space commitments in London, second only to the government.
“Over the next year the sector will see increasing demand for co-working space from larger businesses, as corporate occupiers embrace a more dynamic co-working culture or shorter and lower-risk leases,” says Cushman & Wakefield. “Uncertainty around Brexit may be driving demand for flexible workspace in London, as major corporates look to avoid long-term space commitments.”
“While offices have been the traditional source of space, pubs, hotels and libraries are increasingly of interest to flexible space providers, building on the popularity of coffee shops and cafes as flexible workspaces,” says Elaine Rossall, head of UK offices research and insight at Cushman & Wakefield. “Any brick-and-mortar business that is vacant for a period during the day could be utilised for flexible working, and the availability of vacant retail units could see co-working become a fixture of high streets across the UK.”
Image: Cushman & Wakefield