In the face of tight availability and consistently increasing demand for serviced offices in Central London, all the signs suggest that this corner of the commercial property market is set to continue its impressive upward swing.
In 2015, we learned that the London serviced office market has expanded by a massive 67% over the past decade. Add to that, research by Savills revealed “a significant rise in the number of serviced offices in traditional and prime central business locations”, citing 288% rise in take-up by serviced office providers across Central London compared with the long-term average in 2014. Meanwhile, take-up for Q1 2015 alone equalled that of the whole of 2013.
All this points to a very healthy outlook for the London serviced office industry. But just like every successful and fast-growing market, change is afoot.
One of the most notable trends we’ve seen over the past few years is that of coworking, which has taken the flexible workspace sector by storm. Coworking spaces are typically vibrant, shared open-plan offices featuring various desk and workspace configurations to accommodate freelancers, startups and mobile workers on flexible gym-style memberships.
Of course coworking isn’t for everyone, and it’s generally not considered a long-term solution.
Companies habitually outgrow their coworking spaces and move on, often to serviced or managed offices. As a result, we’ve seen a distinct ‘hybridisation’ of spaces, as many traditional serviced office operators have threaded coworking-style workspace options and memberships into their office space packages to offer greater variety for their clients.
This ‘hybridisation’ of office space is flourishing in Central London, and it’s all centred around the growing need for workspace flexibility.
But we’re not just talking about freelancers and small businesses. Flexibility has become a top priority in businesses of all sizes, from funded startups and growing SMEs right through to FTSE 100 firms, triggering many large-scale corporates to house project teams in serviced offices and even coworking spaces.
What’s driving this trend? A combination of factors, including high demand for commercial property in London and subsequent tightening of availability in the most sought-after locations. That, plus a thriving startup scene in London that’s creating new ‘hotspots’ – think Tech City and Silicon Roundabout – which is in turn developing its own startup ecosystem.
Writing for Workplace Insight, Paul Goodchild commented that coworking “thrives particularly where there are clusters of start up businesses”, particularly TMT (telecoms, media and technology) startups, and goes so far as to suggest that “the new world capital of coworking may well be London”.
Coinciding with this is the latest Global Coworking Survey by DeskMag, just released, which boldly claims: “This is the year we’ll see over 10,000 coworking spaces open by the end of 2016.” In addition, the report claims that 62% of coworking owners want to expand their spaces this year, suggesting that the coworking market has plenty of mileage left in the tank.
It’s not just coworking that’s taking the flexible workspace market by storm; it’s the way companies approach office space that’s changing dramatically, too.
Offices have become a place not just to work, but also to live and play.
As noted by Alistair Subba Row in Property Week (29th January), businesses of all shapes and sizes are looking for spaces that accommodate not just workspace, but “in-between spaces” for cafes, lounges and meeting areas designed to encourage collaboration and knowledge-sharing between staff. He cites flexible office providers The Office Group, Workspace Group and WeWork as current examples of how operators are challenging how we perceive and utilise office space.
“The death of the fixed office has been grossly exaggerated,” he wrote, “but it is no longer simply where we go to perform our jobs: it is a hub where we can meet, speak and share ideas. Talent cannot thrive in isolation. The best ideas originate through the collision of thoughts, viewpoints and personal communication. The office serves as the laboratory where these innovative ‘chemical reactions’ can occur.”
Large firms are re-designing their workspaces to reflect these needs, while smaller companies and startups are turning to serviced offices and coworking spaces for their collaborative fix and clash of ideas. It’s no wonder the London serviced office scene is changing to reflect these needs. It’s not just positive change, it’s evolution in the works.
If you want to be a part of this exciting new landscape, contact the team at LondonOffices for help finding the perfect office space in Central London. Whether you’re looking for office space that’s fit for a startup, short-term project space or a longer-term corporate solution, contact us for free expert advice on serviced and managed workspace in London.