London Flexible Office Space Report - Q3 2024
Rubberdesk's Flexible Office Space Report examines actual flex office availability and pricing as well as trends in London.
Our Flexible Office Space Market Report for London provides an insider's view of the current supply and pricing of the Greater London coworking and flexible office market.
"As supply outpaces demand, London’s flexible office market is seeing a surge in available space, with vacancies rising to 5.8 million square feet. Businesses, though optimistic about the easing economic landscape, remain cautious, capitalizing on flexible terms without committing to heavy investments.”
Jim Groves, CEO
This report is perfect for managers who want to research the office market and understand the real costs of renting office space. Whether at the start of that journey or at the end and in negotiations, Rubberdesk analytics and experts are on hand to help and provide free impartial advice.
Traditional Landlords' Shift to Flexible Offices Reshapes London Market Dynamics
London's commercial office landscape is undergoing a significant transformation as traditional landlords increasingly package conventional leases into flexible managed service agreements. While overall desk rates rose 2% to £629 in Q3, this increase primarily reflects the introduction of premium enterprise quality managed offices rather than demand-driven growth.
Despite easing inflation, falling interest rates, and growing economic confidence, London businesses remain cautious about significant capital expenditures. This caution has led to new supply once again outpacing demand and when combined with new inventory from commercial office landlords converting traditional leased spaces into flexible arrangements, vacant space in London rose a whopping 19% in Q3 to 5.8 million square feet.
"We're witnessing a fundamental shift in how commercial office space is being packaged and marketed," said Tom Petryshen, VP of Growth & Analytics. "As high vacancy rates and hybrid work models persist, landlords have strategically pivoted to provide flexible agreements to meet evolving market demands."
Regional Market Impact
Pushed by higher growth in larger enterprise offices, the median price per desk rose 2% to £629, the highest in over a year.
Central London exemplifies this trend with a 29% increase in flexible inventory to 4.3 million sq ft. While enterprise office rates (50+ staff) rose 9% to £884 per desk, smaller office rates actually declined 3% to £662 per desk, reflecting the true state of market demand.
East London saw similar patterns, with larger offices (26+ staff) maintaining overall rates at £465 per desk, while smaller office rates decreased slightly to £420 per desk.
North London's 14% rate increase to £400 per desk reflects the introduction of higher-grade converted space rather than organic growth, with enterprise offices actually declining 18% to £585 per desk.
Notably, desk rates for larger offices accommodating over 50 staff increased by 12% to £819 per desk, while rates for smaller offices for 10 or fewer people remained flat at £560 per desk.
Key Market Trends:
Strategic Conversion: Traditional office spaces, typically leased on 5-10 year terms, are being packaged under flexible managed service agreements as landlords react to tenant demand for simple all inclusive agreements;
Enterprise Space Impact: New premium enterprise offices (50+ desks) entering the market drove the overall rate increase, reaching £819 per desk, up 12%;
Stable Small Office Market: Rates for offices with 15 or fewer desks, where current demand is concentrated, remained steady at £560 per desk; and
Growing Flexible Inventory: Available flex space increased 19% to 5.8 million square feet, primarily from converted traditional office space.
Market Evolution
A new category of flexible workspace has emerged as landlords partner with managed service providers, expanding the market beyond traditional coworking and serviced offices to include new spec offices that include:
- Traditional office space packaged with modern fit-outs
- Essential amenities that businesses now expect as standard
- End-to-end management services
- Simple billing and all inclusive rates
This evolution gives businesses more choice than ever before, with Rubberdesk providing a single platform to easily compare live rates and benefits across all categories - from coworking, serviced offices to these new managed solutions.
Market Outlook
While economic conditions show signs of improvement, the office market transformation appears to be structural rather than cyclical. The continued switch of traditional office leases to flexible managed service contracts is expected to persist as property owners meet the new market demand.
Source: Rubberdesk October 1, 2024
Larger Offices Push Rates up 1% in Central London
London's largest region, Central London encompasses Victoria in the West to King's Cross in the North and Southwark in the South giving businesses the widest variety of office space including size, quality, and price points of anywhere in Europe.
After a relatively flat first half of the year, the amount of available flex inventory grew 29% to 4.3 million sq ft in the past quarter spurred on by a slew of new offices. Though prices increased marginally to £708 per desk, this rate increase was primarily driven by higher cost executive offices for 50 or more staff which increased 9% in Q3 to £884 per desk pushing the overall desk rate higher.
While prices were down across most areas of Central London, rates for offices in key sought after areas such as SOHO and Marylebone increased 12.3% & 2.5% respectively to £842 and £808 per desk. Desk rates in Mayfair, which spiked in excess of £1,000 per desk in Q1, fell for a second consecutive quarter to £941 per desk.
Despite this increase for larger offices, desk rates for smaller private spaces for 2-10 people receded, falling 3% to an average of £662 per desk while inventory increased 124% to 346,900 sq ft.
Source: Rubberdesk October 1, 2024
Supply Retracts as Demand in East London Grows
As London's second largest region by available inventory, desk rates in East London rose marginally to £465 per desk after two declining consecutive quarters. Available supply fell 3.2% for the quarter.
Accounting for 26% of available inventory, Shoreditch continues to offer the best value in East London when it comes to available options and price with desk rates at £551 per desk, down 14% in the past quarter. Whitechapel and Spitafields also rank highly amongst businesses for choice, price and accessibility to the city centre with rates at £465 per desk while Canary Wharf gives businesses the option of a serviced or managed office in A class buildings at super affordable rates.
Like Central London, enterprise offices for 26 or more staff kept overall prices in the region a float as desk rates for these larger offices rose 4% to £525 per desk. Rates for smaller offices of less than 10 people fell 1% to £420 per desk. Down 11% for the quarter to £605 per desk, offices for teams of 50 to 300 make it feasible for larger teams to build the workspace that best fits their hybrid model.
Source: Rubberdesk October 1, 2024
Desk Rates Fall 5% Across West London
For a second straight quarter, desk rates across West London fell 5% to £440 per desk while inventory fell 3% from Q2 to 370,150 sq ft.
After seeing a 45% increase in much needed supply in Q1, available inventory in West London fell 2% from Q3 to 337,300 sq ft. Desk rates which had been on an upward trend through the first 3 quarters of 2023 fell 2% to end the year at £475 per desk, down from £484 in Q3.
Hammersmith and Hounslow saw modest increases of 2% to £537 and £358 per desk while office space in Ealing and Richmond upon Thames experienced an 8% drop in rates to £300 and £445 per desk respectively. Offices in Kensington & Chelsea remained the most expensive at £584 per desk.
A 20 percent fall in desk rates for midsized offices of 11-15 people in combination with a 7% decrease across micro offices for 1-4 people dragged the overall rate down as prices for these smaller offices fell to £362 and £385 comparatively.
Larger offices for teams of 26-50 remained the most expensive at £559 per desk, after increasing 2% over the past quarter.
Source: Rubberdesk October 1, 2024
South London: Desk Rates Continue Upward Climb
Although median desk rates in South London have been on an upward trajectory over the past 3 years, South London’s vast region still provides a variety of options for businesses looking to rent office space on a short term basis. While smaller offices for teams of 15 or less staff can be found in abundance, there are a growing number of larger enterprise spaces that include meeting rooms for teams of 16 to 60 in the boroughs of Southwark, Wandsworth, and Merton.
For the best value, business located in Lambeth and Merton will find desk rates below £227 per desk.
When it comes to rates, the businesses can find large enterprise offices for 26+ staff for less than £120 per desk in Merton. For businesses looking to be closer to the city, rates in Southwark range from £338 for a small 1-4 person office to £576 for a 26-50 person office.
Further South West, desk rates for office space in Kingston upon Thames range from £127 for a 15 person office to £350 per desk for a 5-10 person office.
Source: Rubberdesk October 1, 2023
Rates Jump 14% in North London as Supply Climbs
After a gradual decline in desk rates across the Northern region over the past two years, prices for flexible office space finally showed signs of life rising 14% to £400 per desk, despite an 18% increase in supply.
Unlike Central London which saw most of new supply devoted to larger offices, the supply of new inventory in North London has been more evenly distributed across the breadth of offices sizes we track. And while rates rose across most office sizes, larger enterprise offices for teams of 50 or more declined 18% to £585 per desk providing greater value.
With prime locations like King's Cross close to Central London, North London provides the best of both worlds for businesses looking to be close to the city without the same budget. Desk rates in the district of Islington and Hackney for example range from £467 to £530 per desk while offices in Camden Town tip the scales with a median desk rate of £545. The districts of Harrow and, Ealing in North West London offer the most economical options for businesses to set up a secondary office for teams of 1 to 70 at a median rate of £125 per desk.
Source: Rubberdesk October 1, 2024
Select a region: Central London | East London | West London | South London | North London
Methodology
- All prices presented in this report are based on the median rate for a location or office size across an entire month
- Availability is based on the inventory inside the Rubberdesk platform and includes coworking desks and available offices that hosts share with Rubberdesk
- Actual Flex office availability may be higher as not all hosts share 100% of their unoccupied office space with Rubberdesk
Our Price Guides
- UK Flexible Office Space Report
- City of London Office Price Guide
- East London Office Price Guide
- Birmingham Price Guide
- Manchester Office Price Guide
- Scotland Office Space Price Guide
- Dublin Office Price Guide
About Rubberdesk
Rubberdesk is the UK’s flexible office marketplace with thousands of fully furnished serviced offices and coworking desks ready for you to move in and rent by the month or year. Since having launched in the UK in early 2020, the Rubberdesk platform now encompasses over 6,500 offices, an estimated 7.3 million sq. ft. of space with a capacity for over 145,000 people.
Rubberdesk’s proprietary platform combined with industry insights from their office specialists helps customers find the best office for their unique needs. With a view across all available options, they simplify the process to create a bespoke shortlist, arrange tours and negotiate the best deals. All for free and without obligation.
Rubberdesk provides Flex Powered by Rubberdesk for commercial agents across the UK.
Rubberdesk also operates in Australia and Ireland.
Media Information
For further information, images and interview requests, please contact:
Laura O'Sullivan: +447456247744
Gareth Smith +447762809786
