Flexible workspace could account for as much as a fifth of the UK office market by 2023, according to new projections.
Researchers at architecture firm Arney Fender Katsalidis and Worktech Academy have predicted that corporate occupiers will flock to flexible space as they try to find the right balance between working from home and in the office.
The prediction far exceeds previous forecasts, which have broadly suggested that flexible space will grow to around 12.5% of the market over the next two years. The researchers now think it could hit 20%.
The increase is largely driven by corporations, to which flexible operators are expected to offload at least 80% of their space, compensating for a corresponding downturn in SMEs, start-ups and freelancers.
The International Financial Reporting Standard for lease accounting, which came into force on 1 January 2019, is expected to make flex space yet more appealing to big occupiers. The new rules allow businesses to, in effect, “write off” short-term leases of less than five years on their balance sheets.
The growth could accelerate the trend for traditional landlords to offer flex space, leading to increased competition between landlords and operators vying for the same clients.
Great Portland Estates chief executive Toby Courtauld has predicted that flex could become the dominant use type across the landlord’s office portfolio.
Earle Arney, chief executive at Arney Fender Katsalidis, said: “Our research shows the flex workplace market has a bright future.
“The purpose of flexible space though will morph to be a much more strategic instrument deployed to create communities, foster collaboration and embed the culture within an organisation.”
Jeremy Myerson, director of Worktech Academy, added: “The flexible space sector suffered in the pandemic like most other businesses. But our report suggests that short-term pain could be followed by a resounding bounce-back in the medium to longer term.
“If flexibility and agility are the new watchwords in the hybrid world of work, then it makes sense that the flexible office market should grow quickly.”
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