The flexible office market has seen rapid growth over the last five years with more than 4 million sq ft leased to flexible office providers in Central London. 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.
The London market now has more than 150 flexible workspace providers in over 650 different locations. Despite We Work dominating the headlines, 26 new providers have entered the market in the last year alone.
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 providing great value for money, while in Peckham Rye prices have decreased over the period by 9% to £175.
In Charing Cross monthly desk rates may have fallen by 23%, but they still remain in line with the London average at £534. Canary Wharf has also seen a 6% decrease in office prices compared to the year before, however prices in the area still remains relatively high at £600.
Temple has seen the greatest increase in cost per desk (69%) between 2017 to 2018 and the regeneration of Victoria has been reflected in desk price with an increase of 30%
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.”
“Looking forward, we anticipate that the sector will expand further, in response to the 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.”
Elaine Rossall, head of UK offices research and strategy at JLL, said: “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.
Hubble’s data shows the average cost per desk in London in 2018 with Bond Street (£850) being the most expensive place in the Capital for a desk (on average), closely followed by Marble Arch (£800) and Green Park (£781).
The average cost per desk in London in 2018 (top five, Hubble):
- Bond Street, £850
- Marble Arch, £800
- Green Park, £781
- Paddington, £750
- St Paul’s, £750
The average cost per desk in London in 2018 (bottom five, Hubble):
- Peckham Rye, £175
- Bethnal Green, £279
- Putney Bridge, £283
- Hoxton, £298
- Angel, £358