Editor’s Note: Flexible future
Hubble and Essensys, two specialists in coworking and serviced offices, have conducted separate studies into the rise of flexible space. Here are some of my takeaways from scanning the 170 pages they produced.
WeWork is not the only player in town. Hubble found 150 providers of flexible offices in London, in its study conducted with JLL. That said, WeWork can quickly dominate an area. WeWork’s commitment to lease the entire 280,000 sq ft 2 Southbank Place in Waterloo means that 13% of the area’s office stock will be occupied by them. Expect fragmentation to continue, a bit like corporate and local indie coffee shops.
Flex might be growing but it is still a relatively small part of the landscape right now. The global coworking market is expected to grow at a seven-year compound annual growth rate of 21% to 2022, from 17,725 centres in 2018 to 30,432 centres in 2022. In its shareholder prospectus at the time of its IPO last month, Essensys, whose software powers serviced offices, cited CBRE research that showed four in five UK commercial landlords were planning to launch a flexible office space within the next years. Hubble and JLL said the London flex market was 2% in 2009, is 6% today and will reach 11% in 2023. Flex makes up less than 1% in the US, where JLL believes it will get to 30% in a decade. Some leap.
It’s not cheap but there are deals to be done on desk price. The average transaction in London in 2018 was 15% below list price. Desks in central London typically cost between £500 and £800 a month. Hop to Angel to snag a desk at £358/month, Hubble says.
Despite all the talk of yoga classes and free (with your £500/month desk) beer on tap, in reality the amenities users crave remain more common sense than weird ‘n’ wonderful. The fundamentals:
- Strong and fast internet: crucial in every industry
- Meeting rooms included: spiralling add-on costs are not popular
- Varied layout. Mix of private and breakout space for agile working
- Natural light: essential to team morale
Essensys shares are now trading at 213p after launching at 151p on 29 May. The business is valued at £102m.
Hubble’s platform provides the ability to search and compare across the whole flexible office market and filter by up-to-date pricing, live availability, location, amenities, exclusive offers, and more. It finds 120 new offices for customers each month.
Hubble’s Flex and the City London 2019 market report