“Flexible workspace has moved from the fringes of the market to centre stage with demand continuing to grow year on year” - GKRE, The Flexible Workspace Market, July 2017
Green Kinnear Real Estate Ltd (GKRE), a BCA Member and advisor to the flexible workspace industry, has released a new report highlighting key trends currently impacting the flexible workspace market.
Amongst its own findings and drawing on research from CBRE, Deloitte, JLL, the BCA and others, GKRE has identified positive growth patterns within the industry, despite the ongoing turbulence of the current UK political landscape.
Of course, given the phenomenal pace of expansion from BCA Members across the UK, industry growth comes as little surprise -- especially in Central London.
Yet what’s particularly interesting is the strength and continuing growth of flexible workspace in regional areas.
GKRE’s report draws on data from the Instant Group (2016), demonstrating that Leeds now boasts the highest number of flexible workspace centres in the UK outside of London. At 61 centres, Leeds comes ahead of major UK cities including Birmingham, Edinburgh and Manchester.
Indeed, Leeds has a vibrant flexible workspace market that’s home to a variety of multi-national workspace companies and thriving independent operators (in 2015, Stonebridge Office in Leeds was named Independent Business Centre of the Year at the annual BCA Awards).
Yet whilst there may be strength in numbers, Leeds’s claim to the highest number of regional centres could well be short-lived. It is currently experiencing one of the lowest rates of workspace growth at just 2%, according to GKRE’s data.
That said, upon closer inspection there are a number of indicators that suggest Leeds could be set for a significant growth period.
Based on a separate report produced by GKRE in conjunction with the BCA, Leeds is undergoing an “exciting transformation” which is having a positive impact on the regional serviced office market. The report suggests that the city’s flexible workspace market is buoyed by the strength of its financial centre -- the largest in the UK outside of London, along with a burgeoning tech hub and a number of new operators in the city.
Furthermore BCA Member Bruntwood, the largest regional property developer and operator in the UK, is investing in Leeds and has recently announced that it is working with Leeds City Council to deliver a new £2m Tech Hub to the city.
North West powerhouse
One region that is already experiencing significant growth in its flexible workspace footprint is Northampton in the East Midlands. According to GKRE’s report, Northampton is home to 16 centres and its growth rate is surging ahead at 23% -- currently the highest in the UK.
Yet the most striking statistic comes from Liverpool.
Based on data from 2016, GKRE’s report finds that Liverpool is currently experiencing the highest rate in workstation growth at 76%.
This is at least partly attributed to a sharp rise in demand for flexible office space from regional startups. According to Instant’s Entrepreneurial Index, some of the most notable increases in demand from new businesses took place in the North West, particularly Manchester and Liverpool.
Adding to these findings, BCA member Bruntwood reported a 300% increase in deals at its North Liverpool office developments during 2016.
Speaking to the BCA earlier this year, Charlie Beck, Head of Sales at Bruntwood, commented:
“Liverpool has historically lagged behind Leeds and Manchester as it was hit harder by the recession. It has therefore been one of the toughest markets but now that is changing.
“Small suites are also doing very well as Liverpool is attracting lots of SMEs, start-ups and creative companies. More affordable rents in the city also help. The market in Liverpool is looking very positive indeed.”
Regions drive nationwide growth
Above all, GKRE’s report adds further fuel to the flexible workspace fire and demonstrates that growth is continuing right across the UK.
Around two thirds of the flexible workspace market in the UK is run by operators outside of London, and the flexible workspace market in the UK accounts for around 36% of the world market.
As such, it is clear that the regions are playing a very significant and active role in promoting growth in the flexible workspace industry both at home and on the global stage.
This ties in with the BCA’s own research, released in June 2017, which found that the business centre sector continued to grow in 2016, with 11% growth in the number of workers based in business centres and provider turnover also up by 13%.The hard facts really do tell the story. Now more than ever before, regional flexible workspace growth is driving the industry onwards and upwards, promoting its key benefits for growing businesses and its vital support to the wider UK economy.