Flexible workspace rates in Central London continued to rise over the last year hitting new highs of £690 per month, an increase of 14% on the year before. London has shown a steady increase in the value of workstations thanks to high demand in desirable central areas.
According to research by The Instant Group, the main areas for proportional growth have been those just outside of the capital’s city centre. Instant reports 120% growth of enquiries in East London where interest in flexible space has been growing over the last 18 months. Another contributing factor here is the lack of large conventional space.
Demand for flexible workspace doubled within Greater London including the Docklands and Canary Wharf, where desk rates remained attractive (circa £486pcm) compared to more expensive areas such as central and West London where average workstation rates are around £727pcm and £716pcm respectively. The popularity of East London is a result of the combination of appealing rates and proximity to some of London’s largest financial services companies which is an enticing mix.
North and South West London saw enquiry levels rise by 30% over the year as demand continued to rise alongside increasing numbers of premium workspace locations and those offering combined co-working and hybrid spaces.
Westminster and the City of London generated the most demand in both London and the UK by a considerable margin over the last year, despite also commanding the highest desk rates at £753pcm and £747pcm respectively.
Camden and Southwark are two other London hotspots that generated significant interest. Demand continues to grow in these areas with the number of enquiries and deals increasing as new operators open locations in these popular areas.
The growth in the number of new centres means an increase in the number of desks available for co-workers. Hybrid centres – those combining co-working and serviced office space – are bucking the overall London trend and showing significant growth within London. Over 25% of centres based in London now offer hybrid work space, the largest percentage within the UK. In the main this growth is coming from existing centres changing their office layouts and communal areas as occupier demand for greater flexibility and multi-use space continues to grow.
John Duckworth, Managing Director UK and EMEA, said: “The ratio of co-working spaces has remained flat in London over the last year with just 12% of spaces reporting to only offer this type of environment. This contradicts the wider UK trend where dedicated co-working centres are increasing in presence, albeit in smaller numbers. This could be seen as a possible indication that we are starting to see some saturation in London in the co-working environment.
“The existing supply in the Capital looks to be maturing with reports indicating that the centres that do exist are expanding in size if not number and expect to continue to grow in the coming years. This is a strong indication that while demand remains high, occupiers are demanding greater flexibility within the office they use and increased space for larger headcounts.
“We also continue to see an increased demand from larger corporates who have recognised the benefits of having the flexibility that comes with shorter leases and the ability to grow and contract depending on the business needs.”
While Regus, WS Group and Leo lead the London market in terms of centre numbers they only make up 17% of centres thanks to the number of small and specialised operators across the London area.Leading flexible workspace providers such as WeWork and TOG have expanded their presence within central areas but are also growing outside of Central London including the 56,000 sq ft TOG in Hammersmith, Uncommon in Holloway and WeWork Shepherd’s Bush.
