Some Central London locations have experienced significant growth in flexible workspace desk rates in the last three years, according to a new report from Carter Jonas, in collaboration with flexible officer broker Office Freedom.
Desk rates in the Shoreditch/Old Street area surged from £371 in 2020 to £664 in 2023 – a 79% increase. Desk prices in St James’s increased by 26% over the same period, from £735 in 2020 to £926 in 2023.
St James’s, Mayfair, Kensington and Fulham were the highest cost London districts in 2023, with SE1, Liverpool Street and Aldgate being among the most affordable Central London areas – Aldgate/Whitechapel experienced a 43.6% fall and Liverpool Street recorded a 25.1% decrease between 2020-2023.
Ollie Lee, flexible workspace lead at Carter Jonas, said: “The initial struggle faced by the City Fringe area during Covid-impacted 2020 has been superseded by a wave of high-calibre building openings, fuelling an upswing in demand. Furthermore, the Old Street area’s market dynamics have been significantly influenced by WeWork’s strategic rent increases since 2020.”
The average lease term for flexible space in Central London has increased from 347 days in 2020 to a peak of 438 days in 2023, with the traditional office lease length in Central London decreasing from 2,409 days in 2020 to 2,044 in 2023.
Canary Wharf and Shoreditch/Old Street have experienced the most notable rise in the average number of desks per deal in Central London in the period 2020 to 2023, with deal sizes in Canary Wharf increasing from 4.6 desks in 2020 to 17 desks in 2023.
Lee said: “Companies including WeWork, The Office Group and SQB have all opened new flexible centres in Canary Wharf within the last three years, providing much-needed high-quality space in the area. Elsewhere the Shoreditch/Old Street market maintained steady growth, with 12 desks per deal in 2020 and 16.3 desks per deal in 2023, supported by larger tech companies looking for space in the area. This analysis points towards a growing preference among larger companies for these areas, likely driven by the greater availability of spacious premises.”
Richard Smith, COO of Office Freedom, added: “The pandemic has undeniably acted as a catalyst, accelerating the transition towards flexible workspaces. Regardless of what happens with WeWork, there is now a large amount of established flex office operators who continue to grow. As businesses prioritise the need for adaptability, the flexible office industry is expected to continue to witness significant growth in the coming years.”
