According to IPPR’s latest report, commissioned by The Open Workspace Providers Group. “Start me up: The value of workspaces for small businesses, entrepreneurs and artists in London”, flexible workspaces generate £1.7 billion for London’s economy.
The report casts light to the benefits and value flexible workspace options offer to local businesses and neighborhoods, stating that “they are key to maintaining the dynamism and inclusivity of London’s economy and cultural life.” Yet it also addresses some of the biggest challenges flexible workspace operators could be facing in the near future.
Despite the growth of the industry in the UK’s capital in recent months and that in times of uncertainty it is of utter importance for small businesses to be able to access affordable and flexible workspace, IPPR found that flexible workspace providers “face a wide range of threats, with sustainability a primary concern for many providers.”
Threats to Flexible Workspace Providers in London
- London’s property market is increasing rent cost for workspaces and their tenants. The report shows that prime rents in the West End have gone up by up to 70% since 2009.
- Because of the uncertainty surrounding Brexit, commercial real estate property costs may drop, which could lead to office and workspace buildings to be converted into residential use.
- “Employment space outside London’s most central economic area is being lost through permitted development rights, which allow the conversion of office space to residential use with minimal planning requirements.”
- Businesses are destined to face a revaluation of business rates in 2017, which means that flexible workspace providers will need to increase their membership rates significantly.
Recommendations To Flexible Workspace Providers
The report also states that London cannot afford to lose out on the economic, social, and cultural benefits flexible workspaces offer; especially considering that “one in three businesses report that the lack of affordable office space is damaging their business.
In this light, IPPR offers the following recommendations to workspace providers.
- It is important for flexible workspace operators to consistently measure their local and economic impact.
- For The Open Workspace Providers Group to gather annually and promote the need for all workspaces to measure their impact.
You can read IPPR’s full report here.
