Market Snapshot
| Study Period: | 2018-2027 |
| Base Year: | 2021 |
| CAGR: | >8 % |
|
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Market Overview
United Kingdom Flexible Office Space Market is expected to grow at a CAGR of approximately 8% during the forecast period (2022-2027).
Like most aspects of work during the COVID-19 crisis, the concept of flexible office space has merely changed. Flexible workspace is still geared toward providing the right environment to employees, but there’s more control over how and when they use that space.
Flex offices in regional locations are at a growth stage and will see a wider range of flexible office operators expand in the regions. Demand in central London markets is likely to recover at a slower rate, although the capital will continue to attract international talent in the medium-long term. The recent growth in tenant-controlled supply is unlikely to unsettle the growth of flex offices as companies seek a full-service offering, with the latest evidence in H2 2021 suggesting that tenant supply is beginning to be withdrawn from the market. We anticipate flex offices will reach 10-15% of office demand over the next couple of years in response to the pandemic, and flex offices will reach 20% of total demand in the long term.
Scope of the Report
Flexible workspace is also known as shared office space or flexispace. This type of office space is fitted with basic equipment, like phone lines, desks, and chairs, a setup that allows employees who normally work from home or telecommute to have a physical office for a few hours every week or every month. United Kingdom Flexible Office Space Market is Segmented by Type (Private offices, Co-working space, and Virtual Office), by End User (IT and Telecommunications, Media and Entertainment and Retail and Consumer Goods) and by City (London, Manchester, Birmingham and Leeds and Rest of UK). The report offers market size and forecasts for United Kingdom Flexible Office Space Market in value (USD Billion) for all the above segments.
| By Type | |
| Private offices | |
| Co-working space | |
| Virtual Office |
| By End User | |
| IT and Telecommunications | |
| Media and Entertainment | |
| Retail and Consumer Goods |
| By City | |
| London | |
| Manchester | |
| Birmingham | |
| Leeds | |
| Rest of UK |
Key Market Trends
Demand for Larger Spaces driving the market
According to the forecast, the volume of flexible office workspace in the United Kingdom is expected to nearly double between 2019 and 2023, reaching 167 million square feet in 2023. Flexible office space, also referred to as coworking space or shared office space, refers to commercial office space that allows short-term leases to individuals, freelancers, small and medium enterprises, and other professionals. In contrast to traditional offices, flexible offices provide equipped and serviced office premises without long-term rent commitment. Between 2015 and 2019, the volume of flexible workspace in the United Kingdom (UK) has increased, reaching 89 million square feet in 2019. As the market is returning post COVID and becoming more and more apparent that 2022 is the year to embrace flex space. With serviced offices filling up and tenants opting out of long-term leases options, they’re beginning to return to the city through seeing the benefits to being housed within a flex space.
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Increase in demand for flexible office space in London
London office transactions have seen a healthy improvement in activity during 2021 reaching GBP 12.6 billion. While still below 2019 levels, the leap in volumes from 2020 was significant, up by over 30% year-on-year. 61 lots changed hands in Q4 2021 alone with 14 above GBP 100 million at an average lot size of GBP 196 million. Q1 2022 has the potential to be a bumper quarter for activity, with several major lots currently under offer. As per estimation the London-wide total to more than exceed the 10-year quarterly average of GBP 3.9 billion. Also expecting potential for further yield compression off the back of a number of prime assets changing hands in the first half of 2022.
Competitive Landscape
United Kingdom Flexible Office Space Market is fragmented with lot of companies in the industry. The developers are trying to bring new and lower cost products to meet the current demand. Evolving technological advancements such as new proptech solutions are driving the market in terms of increased transactions and better management of the real estate services. Some of the major players in the United Kingdom are IWG, BizSpace, WeWork, Flexspace and Workspace.
Major Players
Recent Development
March 2022: Currys announces the launch of its new hybrid working models for all corporate and commercial employees in the UK. As part of its new model together with WeWork, one of the leading global flexible workspace providers, Currys will equip its 1000+ corporate workforce with WeWork All Access passes, enabling them to visit over 50 UK WeWork locations. Additionally, to support regional hubs, Currys will also be refurbishing several spaces in its own stores across the UK, giving colleagues even more flexibility about where they work.
November 2021: Workspace Group PLC has announced that it has acquired The Busworks, in Islington, for a total of GBP 45 million (USD 59 million). This off-market acquisition is being funded from existing facilities. The property provides 104,000 sq. ft. of net lettable space across two conjoined warehouse buildings on 1.6 acres. It is currently operated as a multi-let business centre with customers on licences. The property is 65% let and is being acquired at a net income yield of 3.4% and a capital value of GBP 431 per sq. ft.
Table of Contents
1. INTRODUCTION
1.1 Study Assumptions
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
4.1 Market Overview
4.2 Technological Trends in the Industry
4.3 Government Initiatives and Regulatory Aspects
4.4 Industry Value Chain Analysis
4.5 Insights on Office Rents
4.6 Insights on Office Space Planning
4.7 Impact of COVID-19 on the Market
5. MARKET DYNAMICS
5.1 Drivers
5.2 Restraints
5.3 Opportunities
5.4 Porter's Five Forces Analysis
5.4.1 Bargaining Power of Suppliers
5.4.2 Bargaining Power of Consumers/Buyers
5.4.3 Threat of New Entrants
5.4.4 Threat of Substitute Products
5.4.5 Intensity of Competitive Rivalry
6. MARKET SEGMENTATION (Market Size By Value)
6.1 By Type
6.1.1 Private offices
6.1.2 Co-working space
6.1.3 Virtual Office
6.2 By End User
6.2.1 IT and Telecommunications
6.2.2 Media and Entertainment
6.2.3 Retail and Consumer Goods
6.3 By City
6.3.1 London
6.3.2 Manchester
6.3.3 Birmingham
6.3.4 Leeds
6.3.5 Rest of UK
7. COMPETITIVE LANDSCAPE
7.1 Overview (market Concentration and Major players)
7.2 Company Profiles
7.2.1 IWG
7.2.2 BizSpace
7.2.3 WeWork Management LLC
7.2.4 Flexspace
7.2.5 Workspace
7.2.6 TheOfficeGroup
7.2.7 Landmark
7.2.8 Newable Limited
7.2.9 The Office Providers
7.2.10 Instant Group
*List Not Exhaustive8. FUTURE OF THE MARKET
9. APPENDIX
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Frequently Asked Questions
What is the study period of this market?
The United Kingdom Flexible Office Space Market market is studied from 2018 - 2027.
What is the growth rate of United Kingdom Flexible Office Space Market?
The United Kingdom Flexible Office Space Market is growing at a CAGR of >8% over the next 5 years.
Who are the key players in United Kingdom Flexible Office Space Market?
IWG, BizSpace, WeWork Management LLC, Flexspace, Workspace are the major companies operating in United Kingdom Flexible Office Space Market.
