In its latest Flexible Market Snapshot, Workthere reports that serviced office occupancy levels in London stand at 82% while the rest of the UK’s contract occupancy was higher at 85%, due to limited stock. In December 2021, occupancy rates stood at 71% in London and 68% in the rest of the UK.
As a result of increasing demand, the average cost for a private desk in flexible office space in the UK reached £525 in H1 2022, which is a 22% increase year on year and surpasses the desk price pre-Covid by 13%, according to Workthere. In London, prices now stand at £616, a 21% increase year on year and 4% up on 2019 figures. Desk prices in the regions have increased by 17% year on year and with current levels at £298, 11% above pre-pandemic levels.
Workthere has seen enquiries for flexible office space up 64% year on year, and up 143% on pre-pandemic levels. A significant proportion of demand is from occupiers that want a workplace outside of their home, with this demographic representing 27% of Workthere enquiries.
New businesses made up 18% of enquiries. This has been driven by companies that received funding during the pandemic and have been looking to secure their first office. The search for project space made up 15% of demand, as companies have seen flexible offices as a viable option for short term projects.
Workthere’s research also shows that the average contract term length is now 12.3 months, which is down 8% on last year. The level of rental discount has decreased from 23% to 11%, which is reflective of the demand in the market.
Jack Williamson, head of Workthere UK, comments: “Demand and pricing levels for flexible offices in London and the regions is now above pre-pandemic levels, which is a remarkable recovery in the last six months, showing the fundamental shift in demand as more businesses seek both ease and flexibility from their office space. It is also clear that more good quality flexible office space is needed across almost all markets as we see supply fall, creating opportunities for operators and landlords alike.”
