Serviced office and co-working providers have set a record for the largest share of space leased in Central London for the first time, according to Cushman & Wakefield’s latest research.
During the first half of 2017, serviced office or co-working providers – such as WeWork, London Executive Offices and The Office Group – accounted for 884,235 sq ft of newly-leased office space in Central London. According to the study, the second quarter of the year in particular saw a sudden rise in activity by serviced office and co-working providers with 651,540 sq ft leased. This was higher than London’s traditionally dominant occupational sub-sectors such as technology, media and financial services.
The first half of the 2017 total is more than serviced office and co-working providers managed to account for in the whole of 2016 (853,178 sq ft) and is just a deal or two away from of the sector’s average annual take-up for the last four years (908,971 sq ft). It is almost certain that serviced office and co-working providers will surpass in 2017 their record annual volume of 1,267,926 sq ft set in 2014.
Nick Riesel, Managing Director at FreeOfficeFinder, commented: “We’ve noticed an increase in recent trends moving towards serviced offices & co-working in the commercial property market. Major operators such as WeWork, LEO and The Office Group have made significant additions to their Central London portfolios. The statistics are proof that the market is showing increasing demand for flexible office space.”
In total, 4.8 million sq ft was let in Central London during the first half of the year – exceeding by 10% the same period in 2016.
Elaine Rossal, Head of Central London Research, Cushman & Wakefield, said: “Serviced office and co-working providers aren’t the only reason for the positive occupational picture in London but the two biggest transactions in the second quarter of the year have both involved WeWork as tenant. At a time when some sectors are wrestling with the impact of technology, Brexit or both, the rapid expansion of serviced office and co-working space has meant that this hasn’t translated into any slack in the market. It also means that the variety of office workspaces on offer to occupiers in London is arguably better than ever before.”