Flexibility matters with London workspace

CEO Chris Meredith

The number of major London businesses considering a move into flexible workspace has increased by nearly a third in the past year amid Brexit uncertainty

New research from Officio shows companies seeking flexible accommodation in central London increased by 31% during the year to April 2019 as larger firms sought to streamline operations and make themselves more nimble.

Demand for flexible workspace, office deals made on short term agreements often bundled with services such as telecoms, are seen as an indicator of the future health of the economy as they appeal to start-ups, fast growth companies and to larger firms who wish to make themselves more responsive to a fast-changing market.

Take up of flexible workspace increased by 62% in Canary Wharf, as business leaders wait for politicians to sort out the uncertain economic situation.

Meanwhile demand rose sharply in the Square Mile, increasing by 64% over the previous twelve months.

But the number actually taking flexible workspace deals in The City fell by almost one fifth (18%), perhaps reflecting a 9% increase in average monthly price per desk from £645 to £705 a month.

London’s West End is also proving increasingly popular, with 35% more flexible workspace deals agreed despite the average desk rate per month rising 16% from £700 to £814, leading to a 49% increase on the average contract value.

Across central London, the average contract value increased by 8% as businesses sought flexibility during the past year of uncertainty.

Across the country the average number of desks per office rose from 5.4 to 6 as larger companies chose flexible workspace to allow themselves more room to manoeuvre amid Brexit uncertainty.

While the number of flexible workspace deals was down on the previous year the average deal value and contract length were both up nationally, by 22% and 4% respectively.

Despite six per cent fewer offices in Manchester being taken, these deals proved to be the most lucrative as average contract value rose by a whopping 282%.

Bristol’s business hub is also proving popular, with Officio’s regional enquiries up 54% and actual take up at 21%. But businesses are choosing not to move in Liverpool, as 50% fewer workspaces were taken up compared to the previous year.

Officio CEO Chris Meredith said, “Our latest figures reveal a fascinating picture of how businesses across the UK are responding to Brexit uncertainty.

“It seems many larger companies are considering a move out of traditional leasehold office space and into flexible workspace.

“This could be because they don’t want to commit to long term leases in the current climate of Brexit uncertainty and understand that by moving into flexible workspace they can make their operations more nimble and able to respond to changing market conditions more quickly.

“While the number of deals done has fallen slightly the value of the deals and the contract length both increased which also indicates that larger firms are taking up flexible workspace.

“With Brexit remaining unresolved and business uncertainty increasing we expect to see the trend towards flexible workspace increase further this year.”