The value of the UK’s biggest flexible office providers’ property portfolios has dropped by £1.4bn, as demand for flexible space dropped due to Covid restrictions and enforced work from home.
Currently, according to property and private wealth law firm Boodle Hatfield, the value stands at £24.3bn, down from £25.7bn in the previous year.
However, the value of property owned by flex office providers has increased by more than 300% over the past five years, from just £5.9bn in 2017.
The research didn’t state which office provider portfolios were included in the research, only mentioning WeWork by name.
Boodle Hatfield says the sharp decline in occupancy rates and delays with rent payment forced some operators to shed space, and the drop in value is “largely due to serviced office operators shedding some of the long leasehold property”.
However, operators in the flexible space market are “leaving the pandemic in a healthy state”, notes David Rawlence, Associate at Boodle Hatfield, adding that hybrid working models “will see the sector continue to grow.”
What’s more, the UK’s tech sector, which are major users of flex offices “has come out of the pandemic in an even healthier state than before COVID”, suggesting that tech firms will likely accelerate demand in the coming year, leading to a rebound for flexible space operators.