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Take-up confirms London’s reputation as premier co-working location

Co-working in London
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  • “Gig Economy” continues to drive London’s thriving flexible sector which accounted for 8.8% of total London take-up in 2016
  • Further expansion expected in next few years as workspaces evolve
  • Large corporates increasingly taking co-working space as well as, and alongside, start-ups

Flexible office space has accounted for more than 4.5m sq ft of take up in London over the past five years as the capital has cemented its place as the leading global market for co-working, according to research from real estate firm Cushman & Wakefield.

 

In 2016, flexible office take-up amounted to 842,888 sq ft across Central London, representing 8.8% of total take-up – slightly above the five-year average of 8.4%.

Figure 1: Central London flexible office take-up 2012-2016 (Source: Cushman & Wakefield)

Year

Flexible office take up

Flexible offices as % of total take-up

2012

501,629

7.0%

2013

684,065

6.1%

2014

1,267,926

10.2%

2015

1,238,064

10.1%

2016

842,888

8.8%

10 year annual average (2007-2016)

605,490

5.5%

5 year annual average take-up (2012-2016)

906,914

8.4%



Juliette Morgan, International Partner and Head of Cushman & Wakefield’s Global Tech Group, said: “The latest figures confirm London’s preeminent position as a leader in flexible or co-working space. The boom over the past five years has been fueled by the gig economy, as well as a thriving technology sector which means traditional working patterns have changed irrevocably.

“We are also now seeing larger corporates including the likes of HSBC and Microsoft wake-up to the trend and place staff in co-working spaces as means of collaboration and access to talent. It’s also a signal to the market that as a large company you recognise and embrace innovation.

“Large corporates that traditionally offered big salaries but sterile working environments have had to up their game in response to the growth of the tech sector which has been attracting the cream of the talent pool. This has led to an increased focus on stimulating workspaces that spark creativity and improve employee satisfaction in order to secure and retain the brightest minds.”

Figure 2: Key flexible office transactions 2016 (Source: Cushman & Wakefield)

Address

Unit size (sq ft)

Tenant

2 Eastbourne Terrace, W2

108,576

WeWork

Southbank Central, Stamford Street, SE1

72,710

WeWork

Bastille Court, 2 Paris Gardens, SE1

62,425

Halkin

The Tower, 207-2011 Old Street, EC1

58,974

WeWork

Aldwych House, 81 Aldwych, WC2

56,000

WeWork

1 Lyric Square, W6

55,562

The Office Group

International House, 1 St Katharine s Way, E1

55,418

WeWork

15 Bishopsgate, EC2

52,364

WeWork


From an investor perspective the market for co-working space is also growing rapidly in London via privately-backed providers such as WeWork, as well as listed REIT Workspace. New York-based provider WeWork has expanded rapidly since entering the UK in 2014 and secured a further eight locations over 50,000 sq ft in London during 2016. In addition, Hong Kong-based investor Kingboard purchased We Work’s European headquarters at Moor Place for £271million, with Cushman & Wakefield acting for the seller.

Elaine Rossall, Head of London Markets Research, added: “London’s co-working market – already the largest in the world – is only going to get bigger and expand more rapidly in response to workplace trends. The market will become increasingly competitive as it becomes further established and providers will need a strong brand and points of differentiation, if they are to continue to attract the necessary levels of tenants through the doors.”  

Contact

Richard Coleman

Communications Manager

Phone +44 203 296 4326

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