Serviced Office Demand Trends Up
Metropolis has carried out an exclusive research survey into the rise of the serviced office sector since early 2013 in central London. Occupiers tell Metropolis that their need for short leases and flexible space is driving their demand for increasing volumes of serviced office space, especially in London’s increasingly digital economy, where space needs are hard to predict five years ahead. London is already the home to over 800 of the 2,300 serviced office centres nationally and the sector is growing fast. The results below illustrate the rising importance of the sector to office demand in the capital.
Since January 2013 a total of 4m sq ft of offices has been let to serviced office operators in 170 deals over 5,000 sq ft. At an average one workstation for every 100 sq ft in central London, this amounts to space for up to 40,000 new workstations in the last three and a half years.
Serviced office and co-working lettings peaked at 1.7m sq ft in 2015, when they accounted for 15% of London take-up, but if trends for the first 7 months of 2016 are maintained then this year will almost reach the heights of 2015.
|2016 (7 months)||900,000|
The most acquisitive groups during this time have been:
Much of the interiors work has been carried out ‘in-house’, however there is some evidence of a number of smaller contractors working on the refurbishments of recently acquired space. On the design side a variety of architects have been appointed to advise on revamps including Buckley Gray Yeoman and Morrow + Lorraine.
Looking ahead, Metropolis is tracking around a dozen established serviced office operators such as BE Offices and Orega looking for further centres in London, as well as a number of new entrants to the market, such as Office Space in Town and Pennine Way looking to expand from a current 1-2 centres. Analysts believe the sector could grow in value to over £62bn by 2025.
Copyright Metropolis Property Research Ltd 2016