Flexible offices are projected to grow from a 6.3% (14.7m sq ft) share of the London office space at the end of 2018 to an 11% share by 2023, according to a new report from JLL and flexible office space online platform Hubble.
Last year in the capital 26 new flexible office space providers entered the market, taking the number of players in the sector to more than 150 offering some form of flex space in more than 650 separate locations.
This fragmented and competitive market has meant prices per desk in London from these providers vary, with most private offices costing around £500-800 per desk each month, but with rents in some areas hitting as low as £279 per desk per month.
Between 2017 and 2018 there has been a 25% jump in the average price per desk rates in Hoxton to £298, while in Peckham Rye prices have decreased over the period by 9% to £175, and in Charing Cross monthly desk rates may have fallen by 23%, but they still remain in line with the London average at £534.
Tushar Agarwal, chief executive and co-founder of Hubble, said: “Fierce competition among flex operators has led to attractive discounts for occupiers, providing an opportunity to move into areas which would previously have been too expensive. In fact, on average transaction prices were 15% below listed prices in 2018, so finding and negotiating the best deal without compromising on location is key.”
Elaine Rossall, head of UK offices research and strategy at JLL, added: “The flexible office market in central London is by far the largest and most developed in the UK. The sector has seen its footprint expand rapidly over the five years from 2013, increasing by 26% per annum, compared to just 9% per annum in the previous five years.
“Looking forward, we anticipate that the sector will expand further, in response to growth in demand from larger companies and changes to the way we work – we estimate that by 2023 it will account for 11% of the office stock.”
Average cost per desk in London in 2018 (top five, Hubble):
Average cost per desk in London in 2018 (bottom five, Hubble):