Flexible rates rise in London 9th August 2018

Rental rates in London’s flexible office space market have hit record highs, as growth in the burgeoning commercial property sector shows little sign of slowing down. 

Average desk rates in London have reached £690 per calendar month (pcm), with desks in central London locations fetching as much as £727pcm. Driving the sharp rise in average desk rates is East London, with demand for space doubling in areas such as the London Docklands and Canary Wharf as cheaper rents and proximity to the City tempt more commercial tenants into the area. 

Westminster and the City of London generated the most demand for flexible space in both London and the UK by a considerable margin in the last 12 months, despite also commanding the highest desk rates at £753pcm and £747pcm respectively. 

Simon Rusk, finance director of one of London's largest office space providers BE offices, told City A.M.: "Demand for flexibility has gone through the roof. With factors like Brexit and the ever-changing nature of technology and artificial intelligence, people are driving towards property as an on-demand basis." Rush added: "Property is becoming an on-demand service – you want to use it when you need it, like music on Spotify." Rates are  up 120 per cent in East London over the last year, higher than anywhere else in the country, according to The Instant Group. 

However, the report also found that the ratio of co-working spaces has remained flat in London over the last year, with just 12 per cent of spaces reporting to only offer a flexible workspace type of environment. John Duckworth, UK managing director of The Instant Group, said that flattened performance in London "contradicts the wider UK trend where dedicated co-working centres are increasing in presence, albeit in smaller numbers. This could be seen as a possible indication that we are starting to see some saturation in London in the co-working environment."