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BCA Research Reveals Rocketing Value of UK Flexible Workspace Industry

BCA Research Reveals Rocketing Value of UK Flexible Workspace Industry

Following on from its first report, the BCA has just released a second commissioned research report* looking into the size and value of the UK business centre market. As expected, the figures reveal the ongoing growth and success of the UK flexible workspace industry, and suggests that this flourishing sector is set to continue its upward trajectory over the coming years.

The report draws on data from 2014 and compares findings with the BCA's 2013 research. The full report, available on demand from the BCA, finds that the gross GDP created by the business centres in the BCA survey was almost £8billion, proving that flexible workspace is no longer a sideshow but a major industry taking centre stage.

As for specifics, we've drawn the following 5 highlights from the Executive Summary:

1. A year of growth: 
The business centre sector experienced strong growth during 2014, as indicated by the following statistics:
• Operators provided just under 21million sq ft of space for over 26,000 firms, an increase of 10% on the previous year.
• Between them, clients employed approximately 135,000 workers - an increase of 19%;
• The average occupancy rate was 80% - a figure that was markedly higher in London and lower in others parts of the UK.
• Floorspace increased overall by 9% and turnover rose by 32%.

This expansion looks set to continue, as operators plan to add a further 1.5million sq ft of space over the next 5 years - representing approximately 10% expansion.

2. New openings: 
2014 saw more business centres and more new openings than ever before. Over 80 new centres opened throughout 2014, with the average size of each business centre reaching approximately 20,000 sq ft. By the end of 2014, the total workspace footprint of the research sample stood at 20.6million sq ft.

3. Flexible workspace is more cost-effective than conventional leases:
According to CBRE data, the report shows that serviced office rates are between 23% and 30% cheaper than conventional leases on a like-for-like basis. Serviced office rates rose by 26% in 2014 but managed offices and light industrial unit rates declined slightly by 1.5 - 2%.

4. Clients are staying for longer and growing larger:
Client businesses increased in size and stayed longer in 2014, with the median business size being 5-6 workers (up from 3-4 workers in 2013). There was an average 263 employees per centre in 2014, an increase of 6% compared with 2013, and more firms choosing to stay for 3 years or more - occupying around 31% more space than in 2013. The increase in size and longevity once again proves that business centres have the capability to support the growth requirements of SMEs.

A note on occupation density, which varies significantly across the country. Interestingly, whilst each worker now occupies on average 110 sq ft of space, that equates to 98 sq ft in London and 139 sq ft in Scotland, thereby suggesting that London businesses aim to maximise space efficiency in line with higher workstation rates.

5. Technology is critical:
The report found that access to the latest technology has become increasingly important for occupiers, especially access to superfast broadband and Wi-Fi that is capable of delivering video-conferencing. In addition, certain 'lifestyle' amenities such as good coffee, showers and collaborative coworking spaces are also important elements for clients and their staff.

Download the Executive Summary here or contact the BCA to receive a full copy of the report.

Above all, this data demonstrates that the flexible workspace market is continuing to thrive and deliver enormously high value both to the growth prospects of its occupiers, and subsequently to the UK economy as a whole.

* This report draws on data from a survey of BCA Members conducted by independent consultants CBRE. Responses were received from 47 members, who between them operate 647 business centres - around 28% of the estimated total UK market. The report draws on findings as at 31 December 2014, building on the BCA's previous report which covered data from 2013.


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