London’s flexible offices back above pre-pandemic occupancy levels

London's flexible offices back above pre-pandemic occupancy levels

Occupancy across Central London’s leading flexible office providers has bounced back to pre-pandemic levels, according to a survey conducted by Knight Frank.

The global property consultancy polled 30 of the largest operators of flexible office space in the capital, including firms such as WeWork, The Office Group, IWG, Workspace and others.

The respondents reported that the prevalence of hybrid working strategies and near-term macroeconomic uncertainty has continued to fuel the post-pandemic recovery of flexible offices, with short term contracts and lower overhead costs attracting companies of different sizes and from various sectors.

An overwhelming majority (86 percent) of respondents reported that physical occupancy levels across their office sites are currently above 60 percent, which was the London office market’s pre-pandemic average. As companies target well connected offices that encourage collaborative working, employee wellness and productivity, 76 percent of the companies surveyed said that their clients now use the office four to five days a week in varying capacities. Furthermore, 88 percent said that they plan to increase their office footprint, or number of sites, in the coming year in response to growing levels of demand. 

Access to better serviced offices space in more well-connected locations was the most common factor driving demand (35 percent), followed by companies adopting a fully flexible office set upon expiry of a traditional longer-term lease (25 percent). Additionally, 35 percent of respondents said that financial services companies have been the key driver of demand for space across their coworking sites this year, while 25 percent said that technology firms comprised a majority of their current occupier clients. Research conducted by Knight Frank on post-pandemic office plans found that 47 percent of UK businesses expect to include a greater amount of flexible space in their real estate strategies.

Amanda Lim, Head of Flexible Offices at Knight Frank, commented: “With availability of traditional office space in prime, well-connected City and West End locations limited, flexible offices have witnessed a post-pandemic surge from the sectors that have traditionally driven office demand in those submarkets. Companies of all sizes, from start-ups to larger established businesses, increasingly value the option to move straight into a workspace and easily upsize depending on headcount trends and how much their employees use the office. Flexible office providers also offer a range of amenities, including hospitality facilities, breakout areas and fitness features, that have helped companies attract their staff back to the office to enable the workplace synergy not possible with remote working.”

Notable deals this year include Levin, a specialist recruitment firm for the FinTech, HealthTech, GreenTech, RetailTech and EdTech sectors, agreeing to let 23,000 sq ft at 155 Bishopsgate. The letting saw the company occupy the entirety of Storey, British Land’s flexible workspace brand, in the City tower near Liverpool Street. Earlier in the year, high street and online retail giant Currys announced that it will take a permanent space for 400 employees at WeWork’s building next to London Waterloo station.