Flex space UK Research | 3
Is flex space here for good, or just the latest real estate fashion?
The flex space market is expanding, with growth from both new entrants and established operators. Many operators are changing their strategy in response to increased competition within the sector. Meanwhile, landlords’ acceptance of the sector has supported unprecedented flex leasing activity and the adoption of new landlord delivered models.
Our research with corporates showed that while not all businesses will require flexible space, the clear majority will significantly increase their usage over the next five years. Companies are now considering flex space as an option at the outset rather than as a last resort.
The appeal of the sector is that there is a wide range of offers. Traditional business centres1 is a fixation on co-working space2 sought after.
still have a role and, while there , private offices are still most
Its rapid growth is being driven by the evolving nature of work and the shifting structure of the economy, supported by rapidly advancing technology. Flex space tends to offer no-commitment alternatives to long term leasing, facilities management and up-front capital expenditure. These spaces are being used by individuals, SMEs and increasingly by corporates with the potential to represent as much as 30% of some corporate portfolios by 2030.
“ Traditionally, 10 years ago... the product was dull and dreary and not aspirational really at all. Now though… employers and decision makers can be confident that the workforce will really
enjoy working there and it’s quite cool and sexy suddenly.” National flex operator
1 Business centres - where occupiers rent private offices on a short term basis.
2Co-working space - where individuals work independently or collaboratively in shared office space. 3
Central London, Birmingham, Bristol, Edinburgh, Glasgow, Leeds, Manchester, Belfast, Cardiff, Cambridge, Liverpool, Newcastle, Nottingham, Sheffield and Western Corridor.
Despite these strong fundamentals, the sector still accounts for a relatively small proportion of the UK office stock. JLL estimates that across the key cities3
this report, flexible workplaces currently account for just 5% of all stock.
But over the next five years more than 10 million sq ft will be added to the stock and flex space will account for over 8.5% of the total office stock by 2023.
analysed for
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