Shifts in the way people work is driving the rise of flexible office spaces, and London is leading the charge, according to a new report.
Over the past decade the global flexible office market has been growing at an average of 13 per cent per year, according to a report released today from CBRE. In the UK, year-on-year growth has averaged 10 per cent.
Technology, the rise of self-employment, and more flexible working styles have driven the growth in flexible office space. To respond to demands from staff, more employers are starting to seek out flexibility in their property portfolios.
London is the largest market for flexible offices; there are more than one thousand serviced and co-working offices in the capital.
CBRE said London was leading the way because UK leases tend to be relatively long, and inflexible, driving demand for more flexible office spaces.
Stewart Smith, managing director, Central London, Occupier Services, CBRE said: “London’s success is intrinsic in its make-up and in its ability to constantly innovate.
"London is always ahead of the curve and has adapted its response to technological, behavioural and economic shifts disrupting corporate occupiers by adding to the choice of office types, speed of securing space and shorter commitment terms.”
Demand for co-working spaces has also been fuelled by a 22 per cent increase in the number of small businesses since the financial crash. Political and economic uncertainty has also prompted businesses to think twice before making lengthy commitments to the UK, CBRE said.
Gavin Morgan, Head of Investor Leasing, EMEA, CBRE said: “Investors who can successfully adapt their product will be at a distinct advantage when meeting the changing needs of the European occupier community. Whichever model is chosen, there is clearly opportunity for the investor and developer community to create new flexible office products to meet this diverse range of user demands.”
The challenges for investors include access to the market, and valuations, according to the property experts.