Demand for serviced offices in London and Manchester from tech firms is among the driving forces behind UK market growth in a recent report from Mordor Intelligence.
According to the market snapshot, post-pandemic businesses are finding they need less owned office space, due to the greater proportion of employees who are working some or all of their time from home.
Nearly half (47%) said they expect to include more co-working, flexible and serviced offices in their commercial real estate strategies for the future.
Mordor Intelligence note that these “market tendencies” were already in place before the emergence of COVID-19, but were accelerated by the pandemic and its effects on working practices.
Tech firms demand serviced offices in Manchester and London
Within the nationwide trend, serviced offices in Manchester and London are seeing particular growth in demand, driven by interest from high-tech businesses in the surrounding areas.
The analyst says: “Since many tech enterprises require more than just office space, London and Manchester, as the UK’s top innovation centres, are projected to witness a surge in flexible co-working spaces.
“Many people are looking for features and local amenities that will help foster innovation and creativity while also improving employees’ working lives.”
This is leading in some cases to very large firms moving over to a “core and flex” model of commercial real estate, with the ‘flex’ handled by co-working and serviced office providers.
Serviced offices in London ‘the capital of the world’
The report also claims that flexible workplaces including serviced offices in London not only put businesses in the UK’s capital city, but place them in the “flex capital of the world”.
During the pandemic-hit 2020, 35% of commercial property transactions in London related to flexible workspace. Co-working space, flexible and serviced offices in London accounted for 7% of the city’s total office stock at the start of the year.
As of mid-2021, there were over 6,000 flexible workspaces in the UK, up 7% during the first half of the year, and a sure sign that capacity and demand continued to grow throughout the pandemic.
The UK now has more than 85 million square feet of flex space, including hybrid centres that provide a choice between shared working spaces and private offices for hire.
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