Flexible office operators signed for 63,000 sq ft of space in regional UK markets in Q1 2024, according to new data from Savills.
This was a significant increase on the 4,768 sq ft of deals recorded by flex operators in Q4 2023. By the end of the year Savills expects the annual regional total to surpass the 105,000 sq ft of deals racked up in 2023.
Total take-up of UK flex office space in Q1 2024 was 217,000 sq ft, which is in line with the Q1 2023 figure of 224,000 sq ft. Central London was the most active market in Q1 accounting for 154,000 sq ft of take-up.
In terms of regional locations, Leeds saw a substantial surge in activity in Q1 with three flex office deals completing in the city accounting for 43,000 sq ft.
Alex Knott, associate director at Workthere, Savills’ flexible office specialist, said: “Demand for flexible office space has remained consistent from occupiers and has been driven most notably from corporates looking to diversify their portfolio and flexibility for staff. As a result, we have seen operators looking to expand into undersupplied regional centres across the UK, a trend that we expect to continue in Q2 2024.
“This is a stark change from the beginning of last year, when no flex office take-up was reported outside of London during the first quarter. There is a clear drive from operators to establish a strong footprint on a regional scale with the likes of Runway East, Spacemade, X+Why, Orega and Cubo leading the charge. We expect demand from operators seeking space in London to remain strong, however the best opportunities remains highly competitive and hard to find.”
Savills said its data showed that 50% of deals agreed in the first quarter of 2024 were management agreements.
Simon Preece, associate director in the commercial research team at Savills, added: “Landlords are increasingly viewing flexible office space as an amenity offer within a building and can be a key attractor to appeal to corporate tenants. This viewpoint has helped promote management agreements and we expect this to continue throughout the year.”
