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“FLEX-IT” – LONDON HITS RECORD COWORKING LEVELS
The boom in flexible workspace in London and worldwide has been a trend that turned into a phenomenon. The term flexible workspace encompasses serviced offices, flexible leases, managed offices, coworking spaces and more. October 2019 sees the flexible workspace industry at record levels. The number of coworking spaces worldwide in 2018 was16,599 and it’s on track to reach 18,287 by the end of the year. The rate of year on year growth may have slowed somewhat to 9.5% compared to 15.2% in 2018, but last year saw 2,188 new space openings, a record number.
Latest forecasts suggest global flexible spaces will soon cross the 20,000 mark and look set to reach 25,968 by 2022. This represents 56% growth on 2018 and reflects an average increase of more than 2,500 new spaces every year since 2015.
London leads the way
Top 10 cities worldwide by coworking growth
London is the world’s primary city for coworking growth, with a new flexible office opening every 5 days. London beats New York City into second place with fast growing American tech hubs like Austin and Denver also making it into the top 5.
According to Office Freedom data, central London now offers more than 1400 flexible workspaces and the number of new flexible spaces registered with Office Freedom grew by 42% year-on-year. London boasts over 11M sq ft of flexible office space, the largest stock in Europe and has more than 300 workspace providers. The increase in available stock and competition between providers is driving ever more competitive rates and today flexible workspace competes head to head with traditional leasing for large and small requirements.
Nowadays flexible workspace is well represented in the most iconic landmark buildings in London and across the world such as The Gherkin, The Heron Tower, The Shard, One Canada Square, in London and The Freedom Tower, The Empire State Building in NYC and Willis Tower in Chicago.
Two thirds of new space openings globally are new businesses entering the market, the remainder are established operators, large chains and franchises. Therefore, whilst the established space operators are thriving, most new space openings are coming from businesses entering the market for the first time. Last year Office Freedom recorded a 32% increase in new operators in Central London.
Enterprise boldly goes into flex space
2018 saw a shift in market trends with more corporate and enterprise clients looking for flex space. Giants of commerce such as Amazon, Facebook and Microsoft are already invested in flexible workspace and research indicates that up to 40% of individuals working within flexible spaces are part of larger organisations and this is predicted to grow to 60% by 2022. Consequently, Office Freedom predicts a shift towards more hybrid spaces, offering private space as well as traditional coworking.
Focus on wellness
London is a prime example that the flexible workspace sector is now full of predominantly unbranded space that can accommodate small, medium and now much larger requirements, providing high-end contemporary space with state-of-the-art technology, amenities and facilities that are ideal platforms for nurturing and retaining the existing team and attracting the best talent. Today’s flexible workspace provides a habitat that supports staff wellness and welfare that helps companies become happy and productive places of work.
As a result, the industry now attracts large corporations, enterprise companies, tech, finance, pretty much all business types - even traditional sectors such as legal and accounting, who have previously shown little appetite for flex, have been unable to resist its charms.
Investment, consolidation and employee power
2019 is expected to see high growth in some global locations whilst others mature. Office Freedom predicts greater investment leading to more consolidation from large scale providers, with smaller independents carving out niche sectors and sustainable business communities.
Aside from market investment, a recent global industry study of 15,000 business people highlighted a material power shift towards employees who are demanding more flexibility. In the survey 50% of employees are working outside of their main HQ for at least 2.5 days a week and 85% cited resultant improvements in productivity.
Onwards and upwards
Richard Smith CEO and Founder of Office Freedom commented, “The market continues to evolve and thrive. By 2030 up to 30% of office space occupied by the corporate sector is expected to be flexible workspace. At the moment well under 10% of the office real estate market is flex. As in any industry, in a cyclical world, there will inevitably be bumps in the road but relatively speaking it’s still very early days for the industry. Onwards and upwards!”
