Market Insights: London's Flexible Office Space Market Report - Q3 2024
Rubberdesk's Flexible Office Space Report examines actual flex office availability, pricing and trends across the UK up to June 2024.
The size and structure of the UK Coworking and Serviced (Flex) Office can, in effect, be broken down to two separate markets 1) Greater London & 2) everything else. With London making up 75% of the available Flex Office space across the UK, it heavily skews the monthly rental rates & available space.
The following report looks at the cost and availability of flexible office space in key cities outside London. Please visit our January 2024 London Market Report for analysis of rates across Greater London.
“Challenging market conditions and a growing list of options from serviced office and managed private spaces continue to make flexible offices a truly viable option for small to medium sized businesses. By optimizing space utilization to match varying occupancy levels and allowing for flexible expansion, businesses leveraging Flex are reaping substantial savings to bolster their financial performance.” said Jim Groves Co-Founder of Rubberdesk.
After a notable increase in available Flex office space during the latter half of 2023, increased tenant demand has reduced vacant space to 5.65 millions square feet, a drop of 12% in the past quarter. Despite the reduced supply, challenging economic headwinds continue to hamper the larger office market, especially in London, driving median desk rates down 2.9% for the quarter to £475 nationally.
This report delves into major markets beyond Greater London to provide an insight into trends across the UK.
Cambridge once again has the highest desk rates (Median £725, down from £775 last quarter). Which highlights the local peculiarities inherent with flexible office rates, impacted by supply and demand, grade of building, location and the individual economics of a centre such as occupancy and cost base.
Outside of Leeds, which saw a 16% increase in desk rates to £318 per desk, Birmingham, Bristol & Newcastle all reduced. Rates fell -15% in Birmingham to £250 per desk, down 13% in Newcastle to £165 per desk and -9% in Bristol to £375. Rates in Manchester and Cardiff remained flat at £360 and £225 respectively.
When it comes to comparing desk rates across the UK the following chart clearly shows how much the Greater London market skews the national median rate. A four person office in Greater London for example has a medium rate of £550 compared to £275 per desk across many other major cities. It's this type of difference that clearly shows the benefits of a marketplace platform like Rubberdesk.
Source: Rubberdesk June 2024
With many businesses continuing to wait on the office sidelines and work remotely, desk rates across London fell again for a 3rd consecutive quarter. As traditional spaces sit empty, serviced office operators continue to see growing competition from landlord held inventory and Managed Service Agreements. However, the reduced Flex Office supply (down 12.8% in terms of sq ft) indicates that demand for office space is soft.
Like many large global cities, desk rates in London vary by location and building grade. Median rates in Central London for example attract a desk rate of £687 compared to £475 in West London and £440 per desk in East London, down 2.2% from last quarter. For businesses happy to be located outside the city centre, desk rates in North and South London are an attractive option at £325 and £294 per desk.
With 44% of the available flex office space catering to teams smaller than 10, this segment offers space across all areas of London at a median rate of £555 per desk while spaces for larger teams requiring more than 50 desks will cost ~£726 per desk due to the extra amenities and private breakout spaces. Location also plays a role with enterprise offices in Central London in excess of £810 per desk.
Despite the dip, desk rates in sought after areas such as Mayfair, SOHO and Marylebone remained above £750 per desk.
What's New: Myo has opened a new office at One Sherwood Street with space available for large teams of 60 to 92 people.
Runway East is set to open a new 7,000 sq ft office at 58 Wardour Street offering suites for teams of 20-100 in November while The Boutique Workplace Company is set to open their first office in the City of London, offering private suites for 2-50 people in October.
Visit our Central London Office Price Guide and East London Office Price Guide for specific desk rates on regions within London.
Source: Rubberdesk June 2024
As the second largest Flex market in the UK, with a reported one million sq ft of total flexible office space, Manchester boasts a wide variety of offices suitable for businesses of all sizes, including enterprises in need of over 100 desks. With larger offices typically offering additional features, such as private whole floors, meeting rooms, and private entrances, which cater to the needs of larger businesses. As such prices average £458 per desk for these enterprise spaces.
After price gains in late 2022 and 2023, desk rates for flexible office space across greater Manchester have since fallen close to pandemic lows at £360 per desk, despite available inventory falling 28% in the past two quarters.
The majority of available inventory is concentrated in Manchester City, offering a diverse range of office sizes. Offices in Old Trafford and Salford are also available along with limited options in Rochdale, Bury, and Bolton. Prices for these locations vary, ranging from £175 per desk in Bury to £384 per desk in Manchester City.
Desk rates for larger office spaces continue to out perform smaller spaces with enterprise offices priced at £458 per desk compared to small spaces with a median rate of £343 and up.
Visit our Manchester Office Space Price Guide for more details on the Greater Manchester region.
Source: Rubberdesk June 2024
The recent spike in desk rates in Q1 was short lived as prices reset as quickly as they rose to close the quarter down 14.7% to £250 per desk. This variation appears to be due to local operators increasing their list prices for a period to test the market.
Rents vary by location as might be expected, with the city centre ~£300 per month, down 2% from Q2, compared to £231 in Coventry and £175 in Walsall.
Regardless of preference, businesses of all sizes will find a full range of spaces available, from the smaller 5-10 person office with a median price of £231, to larger enterprise-style offices with additional amenities for teams of 50 to 120 plus, at a slightly higher median price of £250 per desk.
On the supply side, larger enterprise offices with 26 or more desks increased 25% quarter over quarter to £313 while smaller offices with 1-10 desks fell 26% in the same quarter.
Visit our Birmingham Office Space Price Guide for more details on the Greater Birmingham region.
Source: Rubberdesk June 2024
After repeated quarters of price decreases in the UK's fastest growing flex city, desk rates in Leeds rose 16% to £318 per desk in Q2. This increase came on the back of an 19% surge in vacant space to 64,800 sq. ft.
With more than 6,000 small and medium-size enterprises, which account for more than half of employment, it's no wonder that 61% of all flex offices are set aside for teams of 1-10 people. While there are larger enterprise offices for companies in search of a larger space with more than 25 desks, spaces are limited. On a positive note though, rents for these enterprise offices are priced competitively ranging in price from £160 to £360 per desk per month.
Businesses will find spaces available from national operators including Workspace Hub, Citibase, Orega Serviced Offices, Regus and Landmark Spaces.
What's New: Wizu Workspaces opens their 7th location in Leeds, at One Embankment offering offices for 4-100 desks.
Find the perfect office in Leeds here.
Source: Rubberdesk June 2024
After two years of steady price increases, desk rates in Bristol cooled in Q2, down 9.3%. Despite a 28% decline in supply, rates fell to £340 per desk per month, following declines in many markets across the UK.
With 57% of all offices located in the heart of vibrant Bristol, the options outside the city centre are primarily limited to smaller spaces. However, businesses venturing further out will discover larger enterprise offices in Lawrence Hill, Patchway Coniston and Parkwall & Walmley wards for £315 and £377 per desk.
Offices for smaller teams of 1-15 people account for 71% of all available offices in the Greater Bristol region and are priced from £305 per desk for 5-10 staff, £347 per desk for 1-4 staff and £375 per desk for a team of 11-15. In fact, due to falling inventory, desk rates for teams of 11-15 rose 19% to a new all time high.
The top services operators include national players including Citibase, Chadwick Business Centre, Bizspace and Runway East.
Start your search for a private office in Bristol City today.
Source: Rubberdesk June 2024
Cardiff's thriving business ecosystem of tech startups to creative agencies and professional services combined with a a large university presence have contributed to an increasing demand for serviced offices in the city. Despite a 12% increase in vacant space, desk prices held steady at £225 per desk for a 2nd consecutive quarter.
Offices tailored for teams of 1-10, constitute 62% of the listings on Rubberdesk and significantly influence the median desk rate sitting at £225 per desk. However, for businesses looking for a more expansive space for 26 to 200 people, there are cost-effective options available at a significant markdown. Though these enterprise offices tend to attract a higher premium in cities in London, businesses in Cardiff will find available options for as low as £140 per desk with further savings available for longer terms.
As one of the smaller city centres in the UK, most of the currently available offices are within a 2-mile radius of the city centre providing easy access to many of the amenities the city provides. The top serviced operators include Clockwise, Bizspace Rombourne and Chadwick Flexspace Solutions.
Start your search for office space in Cardiff.
Source: Rubberdesk June 2024
With its close proximity to London and abundant talent pool, demand and supply for flexible office space has grown equally in Cambridge since the pandemic . In fact, desk rates in this thriving city have risen close to 40% over the past 3 years before falling back to £725 per desk. As a result, Cambridge now holds the title of the most expensive city in the UK to rent flexible office space, albeit a relatively small market.
Driven primarily by the surge in demand from small businesses and startups, operators responded by significantly expanding the availability of offices tailored for teams of fewer than 10 individuals—an impressive 47% increase!
Enterprise offices with 26 or more desks command a slightly higher premium, averaging £725 per desk. This is attributed to the inclusion of additional amenities like private meeting rooms and offices. In contrast, coworking desks offer a more affordable option for solopreneurs or small teams who don't require a private space, priced at £275 per desk.
Top serviced office operators in Cambridge include WeWork, Citibase, Mantle Space and The Office Group.
Find offices from these great operators in Cambridge.
Source: Rubberdesk June 2024
After spiking in Q1, desk rates in Newcastle fell back 12% settling closer to their historical average at £165 per desk per month. Though new supply has been hard to come by, there have been a number of new enterprise offices with 50 or more desks added to the market.
While rates for smaller offices of 1-10 remain flat while midsized offices for 11-25 people declined to 35% to £180 per desk. Larger enterprise offices for 50 or more staff bucked the trend rising 27% to £190 per desk.
When it comes to operators, businesses will find deals and opportunities with HyHubs, Citibase, Wizu Workspaces, Airivo and Cubo Work.
See Private Offices in Newcastle.
Source: Rubberdesk June 2024
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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 7,000 offices, an estimated 6 million sq. ft. of space with a capacity for 115,000 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.
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