Flexible office occupancy rates across the UK are holding strong at 80% as companies continue to prioritise flexibility while they address shifting real estate requirements, according to Instant Group.
However, a new report from the online marketplace for flex space said demand is highly contingent on the city, size of space and quality of product.
In London, where supply rose by 3% over the past year, city-wide occupancy has plateaued at 80%. But some submarkets and preferential postcodes made notable gains to surpass that figure, including Westminster, which stood at 86%, Southwark (85%), the City of London (84%) and Soho (82%).
High-end spaces have driven demand in the capital, with premium flex space reaching 84% occupancy, while the rest of the market averages 77%. Demand for quality alongside high occupancy rates has driven prices up by 12% for high-end products across the UK in the first quarter of this year compared with last.
Both city centres and suburban locations are recording a unified trend in the uptick of occupancy, with the central locations proving most popular, Instant Group’s data showed.
In cities such as Manchester and Leeds, the city centre has continued to fare better than the outskirts since 2023. Manchester recorded a city centre occupancy rate of 78% compared with 75% in the outskirts, while in Leeds the gap was marginally lower with 79% in the centre versus 78% outside.
This gap has begun to show early signs of closing, according to the research, which recorded 88% occupancy in Leeds city centre over the first quarter of 2024 versus 78% in the outskirts despite overall Q1 take-up being down on last year at less than 80%. This was mirrored in Aberdeen where overall take-up dropped on last year to around 78%.
In Bristol city centre, occupancy rose from 81% in Q1 last year to 86% this year. But this did not translate to out-of-town sites, where rates declined from 87% to 82% during the same period.
However, in Birmingham the gap is widening, with core locations logging a much lower occupancy at 67%, which rises to 79% in the outskirts.
Edinburgh recorded the top occupancy rate overall at around 91%, surpassing last year by nearly 3%. Also, up on Q1 last year was Reading, which recorded around 80% occupancy in the first quarter of 2024 and Cardiff at around 72%.
These fluctuations are a byproduct of changing hybrid working patterns and requirements, as companies continue to adjust their workspace strategies.
This has had a positive impact on the sector overall as 39% of flexible workspaces in the UK are more than 90% occupied. Companies already using flex are staying put, while newcomers continue to explore their options for more adaptable office solutions.
This is particularly evident in flexible workspaces of more than 30,000 sq ft, which recorded significantly higher occupancy than spaces with less than 10,000 sq ft. Larger spaces across the UK have clocked average occupancy rates of 89%, 10 percentage points higher than that for spaces with less than 10,000 sq ft. Similarly, in London 30,000 sq ft-plus spaces average 86% occupancy compared with 78% in those with less than 10,000 sq ft.
Photo from Instant Group
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