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UK Holds the Largest Global Share of Flexible Workplaces

Mikołaj Niemczycki, Negotiator, Office Agency, Cushman & Wakefield, Poland

Demand for flexible workspace across the world saw record growth in 2017, according to the latest research from Cushman & Wakefield.

The firm’s Co-working 2018 report reveals the extent to which the sector has evolved and matured with the UK leading the way globally. The flexible workspace sector accounted for 21 pct of all office leasing activity in London in 2017. This compares to just 8.5 pct of leases in 2016. The UK now holds 32 pct of global share of flexible workspaces, which is more than the 27 pct in the United States and 22 pct in EMEA (excluding UK).

Central London saw a record 2.5m sq ft of lettings signed for flexible workspaces, more than 21 pct of all commercial office leases in the capital. The average rent paid by flexible workspace providers across the capital also rose to £65.50 per sq ft in 2017, a 10 pct increase on the previous year.

London has an estimated total flexible workplace stock of over 10 million sq ft, which is more than double the estimated 4 million sq ft in second-placed Amsterdam. Both cities have seen a significant surge in transactions from the sector, with activity in Amsterdam reaching 296,000 sq ft or 7 pct of total leasing activity in the city during 2017.

Elsewhere in Europe, burgeoning tech centres have led to strong uptake of flexible workplaces. Berlin is expected to be a beneficiary of Brexit as a home for start-ups and WeWork has huge expansion plans for up to 1,000,000 sq ft in the city. The success of Stockholm’s tech sector has led to declining vacancy rates, coupled with high rents, which will help the growth of the flexible office market.

- Co-working providers were one of the biggest tenant groups driving demand for modern office space in Warsaw in 2017. There was a visible expansion of existing local operators, new entrants with known brands from abroad (Mindspace, Spaces, Rent24) and further development of landlords’ own co-working brands. Despite a substantial increase in stock of over 86 pct in 2017 (currently at 42000 sq. m), co-working’s share in the total stock of modern office space is still under 1 pct. By 2020, this share is predicted to increase with the entrance of other co-working providers with large space requirements (ex. CIC – 15000 sq. m, MeetDistrict – 7000 sq. m)- said Mikołaj Niemczycki, Negotiator, Office Agency, Cushman & Wakefield, Poland. 

Source: Cushman & Wakefield

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