Flourishing UK Startup Scene Leads to Rise in London Workspace Occupancy

Greater London is home to the most UK startups
Greater London is home to the most UK startups

Last year, the number of new businesses starting up in the UK reached unprecedented highs. Over half a million new firms registered in the UK in 2013 – a new startup record.

And this year the tally could go one better. StartUp Britain has revealed that almost 400,000 new businesses have been registered in the UK since January 2014, which is on-course to break last year’s impressive record.

Business centre and coworking space operators may already be seeing the effects. Indeed, research from UK brokerage firm Search Office Space suggests that operators in London are seeing a rise in demand for small spaces.

Statistics by SOS show that take-up of 1-2 person serviced offices in Central London has rocketed by over 52% so far this year – which is all the more notable given that these figures compare a full 12 months in 2013 with only 9 months this year.

Furthermore, SOS has found a rise in the number of businesses growing in size year on year, with 69% more businesses expanding to larger offices of 6-10 workstations this year compared to 2013.

Is there something in the London water?

Richard Smith, founder and CEO of Search Office Space, attributes the rise to buoyant confidence amongst small businesses.

“It will be interesting to see how the last quarter results stack up,” he says. “What is also important are the strong levels of business expansion in central London, indicating strong annual growth in the small and medium sized business sector.”

The trend is a welcome one, and this dramatic rise in workspace take-up has been compared favourably with pre-recession figures.

Business centres have a significant opportunity to catch this influx of early-stage businesses, particularly at a time when confidence and optimism is riding high. The challenge, of course, lies in attracting those ambitious entrepreneurs – particularly given the intense competition from local coworking spaces.

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A report published yesterday on ‘London’s Open Workspaces’ by Kit Malthouse, Deputy Mayor for Business and Enterprise, found that the capital is now home to 162 IACs (Incubators, Accelerators and Coworking Spaces) – which breaks down to 34 Incubators, 16 Accelerators, and 112 Coworking locations spread across the city.

The report claims that over 3,800 SMEs are occupying these spaces at any one time – although it anticipates the figure to be much higher.

While these incubators, accelerators and collaborative spaces may indeed attract businesses in their early startup phase, business centres in London and the surrounding boroughs will find themselves in an ideal position to attract these firms at a later stage in their growth cycle. And with yet more new starts on the cards this year, workspace operators may well see an increase in demand for smaller suites and startup-friendly shared spaces in the very near future.

Indeed, many business centres across London and the rest of the UK have already welcomed their fair share of new businesses – including some of those record-breaking 500,000+ new firms that burst onto the scene last year.

Are you one of them? Let us know.

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