Dr. Gleb Tsipursky – The Office Whisperer
Nirit Cohen – WorkFutures
Angela Howard – Culture Expert
Drew Jones – Design & Innovation
Jonathan Price – CRE & Flex Expert
- Flex space data often oversimplifies pricing, leading to poor decision-making in a growing and complex market.
- The rise of managed offices highlights the need for clearer segmentation between flex office types and pricing structures.
- Real cost insights in flexible workspaces require data that reflects team size, office density, and regional market trends.
There’s a wealth of data and information in commercial property — it’s not hard to find figures, even through a quick search. Overall, this is a good thing; it’s better to have a picture to work from and a range of comparisons than starting with a blank sheet.
However, I’m keen to sound a note of caution: the devil is in the details. We need to be smarter about how data is given to the industry and digested. And, in our maturing industry of flexible workspace, there’s a growing danger that decisions can be made on limited data.
The definition of flex
It’s key to first define the difference between flex and traditional leased space within commercial real estate. Whereas traditional leased space involves longer tenancies, flex offers shorter lease terms, more shared facilities and more flexibility for businesses.
Adding another layer, industry terminology, particularly across different countries, means that for some (particularly in certain territories), “coworking” is interchangeable with flexible space.
However for others, coworking is a different category entirely — standing for a desk in a shared space rather than a flexible office. The data we track needs to reflect this nuance.
An evolving market
The flexible office market is relatively new, especially given that the U.K.’s property market can be traced back to the Middle Ages. And it’s evolving quickly, not least due to the acceleration of hybrid working, primarily brought on by Covid.
The industry has fast grown to encompass so much more than a desk — yet desks are what we’re so often focusing on. There’s a mismatch; the market’s not currently getting the full picture.
The rise of managed offices
The emergence of a new category under the flex umbrella also means it’s time for the industry to take a fresh look. Leases on managed offices (self-contained offices that aren’t centred around communal areas) are on the rise, which means there’s a greater need for segmentation to truly understand how this new flex product impacts the buying decision (and current rates).
Our recent data shows a pretty clear price differential between serviced offices and managed offices, so today’s data needs to highlight this difference.
For instance, a serviced office in central London is currently an average of £682 per desk versus a managed at £814. And in Mayfair, managed offices are coming in at £1,200 against £988 for serviced.
Beware oversimplification
Without data sophistication, current flex space metrics can be misleading or incomplete.
There are two main reasons for this:
1.Offering oversimplified metrics
Flex data typically refers to a cost per desk with the only breakdown offered between a hot desk and a dedicated desk. This barely scratches the surface.
2.Presenting misleading averages
These simplified metrics rarely reflect what businesses actually pay. A company needing 30 desks may see much higher rates per desk than a company looking for 3 desks, for instance, as the larger business may need more amenities.
Why we need to be more nuanced in flex space data
There’s a more nuanced approach needed surrounding flex space data; there’s a need to break down costs in ways that align with the size and needs of the business. Here’s my starter for what we need to work on first:
1.Consider office density
Flex office space is sold by the desk instead of square metre in traditional commercial leasing. When much of the floor is given over to shared facilities, this approach makes sense, but customers should be mindful of office density, which is in itself another good quality metric.
2.Team size pricing tiers
Rather than simple desk rates, we need to analyse costs by office capacity ranges (1-4 desks, 5-10 desks, 16-25 desks, 50+ desks), revealing pricing patterns invisible in standard metrics.
3.Market-specific insights
Our data reveals counterintuitive market differences. In London, larger offices (50+ desks) typically cost more per desk than smaller configurations, while in Sydney, Australia, smaller offices (1-4 desks) can be up to 40% more expensive per desk than larger spaces due to different demand patterns.
4.True cost visibility
By segmenting data according to team sizes and location, we can provide transparency into the actual costs businesses will face based on their specific requirements.
Our industry is changing, and our data needs to change to reflect this. By appreciating the importance of context, stakeholders can better handle the complexities of the commercial property market and make strategic, data-driven choices that fit their goals.
