More than half of UK landlords are planning to develop additional flexible workspace across their portfolios, according to research from the Instant Group, with more than three-quarters experiencing increased demand for this type of space in the past year.
The flexible offices adviser and managed office group's 2023 UK State of the Flex Market report found that 78% of landlords had encountered a rise in requests for flex office space, with it predicting demand for the space could reach 50 million square feet by 2025.
Strong demand for flex office space continues to gather pace, despite the Instant Group's research indicating that the sector is yet to fully recover following the return to work from COVID-19, with demand remaining 11% below pre-pandemic levels.
The poll of more than 200 flex operators and landlords also found that two-thirds of flex operators intend to increase their footprint in the next two years, while "market imbalances" remain for flex space in the UK.
London, described as the epicentre of the industry in the paper, continues to attract investment despite slower demand recover. Declining rates present an added challenge to operators but make the market more accessible in the short term, and "drive new demand among occupiers looking to reduce costs within real estate".
Occupancy rates remain stable at 82% across the UK, while amenities and services are increasingly identified by those purchasing office space as priorities to retain and attract new employees.
This has resulted in an 18% increase, the largest globally, in searches for specific amenities when undertaking an office-selection process. The poll also found a growing awareness and engagement in sustainability among workspace providers.
Gavin Foreman, executive director of UK partnerships at the Instant Group, said in a statement: “Although demand for flex remains relatively stable, our research and market sentiment show a silver lining for the UK flex market. Constant occupancy rates and the fact that flex occupiers are staying put suggest that other forms of flexible space,flex leases, managed and turnkey workspaces, will increasingly appeal to occupiers.
"For workspace providers to succeed in the wider flex sector and to combat competition on pricing, design, environmental impact, and overall user experience, they will need to be laser focused on data and insights to be profitable. We will undoubtedly see a need for aggregated market data to gain the level of granularity and insights key stakeholders need."