Cushman and Wakefield have released further analysis and comment from their latest report into the flexible workspace submarket.
As revealed in their report ‘Coworking 2019: The UK Flexible Evolution Continues’, the appetite for flexible workspace across the UK remains high, with take-up in the capital expected to exceed 2 million sq ft for the third consecutive year.
In addition to the performance in London, Commercial People has compiled the figures and comments from a series of Cushman & Wakefield senior members from across the UK, to give their views on how this bustling submarket is performing, as well as what lies on the horizon.
Despite political uncertainty, Cushman reveals that flexible workspace operators let more than 1.2 million sq ft of space across 40 transactions in Central London during the first half of 2019.
While the numbers produced show a small decline in flexible workspace take-up from the record levels seen in 2017, the global real estate firm states that the total number of transactions is actually increasing over a year-on-year basis (63 in 2017; 77 in 2018)
In Birmingham, the first half of the year saw 229,042 sq ft of space transacted across three WeWork deals, including the 97,000 sq ft deal at Six Brindleyplace.
Andrew Berry (pictured), Partner in Cushman & Wakefield’s National Office Agency team in Birmingham, said: “There are some 4.4 million solo self-employed workers in the UK – 14% of the workforce – a number that has increased by 35% in the decade from 2008. While self-employment increases during a recession, often through necessity, the growth has continued since the end of the global financial crisis as improving technology and changing attitudes have made it an increasingly valid and popular choice.
“At the same time, the accommodation available to the office-based self-employed has increased considerably in quantity and variety, from the individual serviced office to the more collegiate co-working space, with a corresponding range of additional services.”
Manchester has witnessed 198,692 sq ft of space let to the flexible office sector in the area within 2019, accounting for 24.65% of the regions total take-up.
Rob Yates, Head of Office Agency at Cushman & Wakefield in Manchester, said: “The largest transaction of H1 2019 was the acquisition of 125 Deansgate by Spaces, which took the whole building totalling 121,892 sq ft. Other notable transactions included WeWork acquiring Hyphen (51,000 sq ft) and Huckletree making its Manchester debut by acquiring 25,800 sq ft in the Express Buildings. Demand from operators with several centres in Manchester and new entrants continues unabated; we expect that take-up from occupiers in this sector will account for a significant proportion of total take-up for 2019.”
Out of the regions covered Cardiff saw the least amount of flexible workspace lettings, with 21,419 sq ft of space let. However, despite the seemingly low numbers, Cardiff has a severe lack of Grade A office space in the city centre, standing at roughly 100,000 sq ft.
Elaborating further on what these numbers mean, Chris Terry (pictured) of Cushman & Wakefield’s National Office Agency team commented: The serviced office market in Cardiff is traditionally focussed in the City centre and is currently served primarily by local and regional operators offering varying levels of specification from high end to budget space.
“Excluding Regus who operate out of three locations in Cardiff, many of the larger operators including WeWork, Spaces, Orega have all considered Cardiff but are yet to commit, and the lack of Grade A office space in the City centre which currently stands at only circa 100,000 sq ft is likely to be providing an obstacle against some of the larger occupiers entering the market.
“With high occupancy levels reported from existing operators in Cardiff, and Spaces seeking to gain a foothold in Cardiff, we expect further take-up and growth over the next 12 months.”
Please see here for the full report.