London’s Flexible Workspace Market: What The Data Shows

• New research from JLL and online search platform, Hubble, offers a data-driven glimpse into London’s flexible workspace market.
• The study shows that more than 150 providers offer some form of flexible space in over 650 locations, but the market is polarised between a few large operators and a high proportion of smaller operators.
• Flexible workspace in Central London currently makes up 6.3% of the total office stock and by 2023 that figure is expected to rise to 11%.

London is at the forefront of the flexible workspace market; in fact, with over 14 million square feet of flexible workspace, London is one of the biggest flexible workspace markets in the world.

A recent report by Hubble and JLL claims that flexible workspace in London is everywhere. “The expansion of flex has occurred across all parts of Central London”, with the City Core submarkets having the largest share of flexible space. Just over the past five years, Hubble and JLL estimate that over 4 million square feet has been leased to flexible workspace operators in the City Core.

However, the report also found that City Core doesn’t have the largest proportion of flexible workspace.

According to the report, the submarkets with the highest concentration of flexible workspace are Paddington,  Southbank, Shoreditch, and Clerkenwell. Waterloo will soon join these areas, as WeWork has reportedly committed to lease the entire 280,000 square feet of Southbank Place, which would mean that 13% of Waterloo’s office stock will be occupied by the coworking giant.

And although last year WeWork became London’s largest office tenant, Hubble’s and JLL’s data shows that the UK market remains highly fragmented, “with more than 150 providers offering some form of flex space in over 650 separate locations.” Furthermore, the “market is polarised between a few large operators and many smaller operators”, with just 15 operators expanding by more than 10,000 square feet.

Suggested Reading: “Small Coworking Operators are Dominating the UK Market”

Though the industry has grown rapidly over the past five years, it’s not yet ready to slow down. JLL estimates that flexible workspace in Central London currently makes up 6.3% of the total office stock and it estimates that by 2023 it will account for 11%.

Price + Location + Amenities: What Businesses Want from Flexible Space in London

Price and location are two of the most important factors businesses take into consideration when searching for a new office. However, Hubble’s HQ data shows that businesses aren’t just interested in finding a “good deal”.

It’s estimated that 70% of UK flexible workspace is located in Central London, the most expensive part of the country. And yet, businesses are willing to pay the extra price for five main reasons:

• Proximity to customers
• Better transport links
• Employee satisfaction
• Attracting new talent
• Surrounding amenities

However, the vast and varied supply of flexible workspace in London means that companies willing to move out of Central London can get more bang for their buck, especially considering that the average business last year paid 15% less for their new office than the amount listed online. Hubble and JLL expect this trend to continue, “as businesses become more aware of competing brands and the ability to knock down rates.”

Other than price and location, what exactly do businesses want out of their flexible workspace?

According to the report, there are 4 non-negotiable amenities they’re looking for:

1. Strong and fast WiFi
2. Meeting room usage included with membership price
3. Intelligent workspace layout that balances privacy and break out spaces
4. Access to natural light

Suggested Reading: “11 Tricks to Maximize Natural Light in the Workplace”

Once you have those 4 key elements covered, this is what businesses in London value:

• Roof terrace: Hubble reports a +238 increase in the number of searches for a roof terrace.
• Pet-friendliness: Hubble reports a +14% increase in the number of requests from people searching for pet-friendly workspaces.
• Fruits and snacks: Hubble reports that +11% of companies are promoting a healthy lifestyle and want access to healthy fruits and snacks. (Pro tip: Check out the best snacks to improve cognitive function in the workplace)
• Beer and wine: Hubble reports a small but significant (+2%) surge in the number of users that want free beer and wine.
• Gym facilities: Hubble reports that searches for onsite gym facilities have risen 11%.
• Phone booths: In 2018, 17% more Hubble users felt phone booths were an essential part of their criteria.