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Flexible Workspace Market in London Remains Resilient, Say Operators

by Jo Meunier
July 22, 2016
in Business
Reading Time: 4 mins read
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Following a Referendum last month in which the UK voted to leave the European Union (EU), the decision – and its subsequent political and economic impact – has dominated UK news headlines.

There is still some way to go before the UK officially leaves the EU (latest reports suggest it will be towards the end of 2018), but that doesn’t mean the flexible workspace boat isn’t already rocking.

That said, based on comments from three separate industry organisations, there are signs that the London workspace market is currently shrugging off Brexit uncertainties with characteristic indifference.

KYR Survey Leaderboard Size (Allwork.Space) June 2022

Here’s a summary of the latest views from London:

Instant Offices

In a blog post, UK flexible workspace broker, Instant Offices, shared an update earlier this month:

“The UK real estate market is rife with concerns that the country exiting the European Union will result in a lot of business reallocations abroad, producing higher vacancy rates and pressure on rents. Also, wider economic growth is expected to falter and property values might therefore decline noticeably amid fears of rental uncertainty in the commercial property market.

But from our experience in 2008, we would anticipate that there may well be an increase in interest in flexible workspace solutions as a result of this uncertainty. After the initial shock of the result, businesses in the UK and Europe will have to find a new normal and this will include pushing ahead with office moves and consolidation.

The ongoing uncertainty presents an incentive to utilise flexible office space rather than sign up to leases for the medium- to long-term when so much remains undecided about our economic and political future.”

Instant noted that visits and enquiries via their website were down within the initial 24 hours after the poll results – possibly also related to the expected seasonal summer slowdown – but enquiry levels have since regained stability.

WorkPad

WorkPad operates seven flexible workspace locations around London. Post-Referendum, co-founder James Barnett stated in a public communication that they have received “fewer enquiries in recent weeks”.

However, he admits it’s “hard to determine as of yet whether this is due to the initial fallout we’re experiencing in the UK, or if this is business slowing for summer, which is normal.”

He added:

“Although Brexit has caused hesitation within the property market, we don’t foresee the demand for central London properties dipping in the long run. Brexit may cause a lag in property purchases and a delay from investors but both national and internationally based businesses will still respond to the lure of a London based office.”

Office Space in Town

Further to Giles and Niki Fuchs’ comments last month for Allwork.Space, Giles penned a column for Property Week (15th July 2016) in which he discussed the opportunities available for London operators.

“The UK commercial property sector is one of the largest and most highly developed in the world. Although investment volumes slowed in the build-up to the referendum as uncertainty about the outcome gripped investors, we can expect demand for investments in real estate to continue, with the London market remaining a magnet for global occupiers and investors.

… It is in times of economic volatility and uncertainty that businesses look for flexibility, and the serviced office model is the most attractive and appropriate solution.

Also, the temporary slowdown in economic activity, coupled with fears that companies will scale down their workforces, presents an opportunity for the serviced office market. When a crisis hits, we often see senior management being the first to go. It is usually former heads of companies and managing partners who become entrepreneurs themselves, setting up businesses, and in turn feeding the demand for flexible office arrangements.”

What are your views on ‘Brexit’ and the impact on the UK and European flexible workspace industry? Share your thoughts by contacting the editors or interact with Allwork.Space and our readership on Twitter, Facebook or LinkedIn.

*Feature image via Office Space in Town

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Jo Meunier

Jo Meunier

Jo is Allwork.Space's Senior Editor for the UK and Europe. Jo has worked within business centre and coworking circles since 2009, researching and contributing written features for numerous industry publications. She reports on the latest market news and delves into local issues with one main objective: to champion the flexible workspace industry and its members.

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