Building occupancy levels for UK flexible offices continue to rise, despite fall in provider occupancy expectations

Building occupancy levels for flexible offices have continued to increase over the last four months seeing a substantial boost from 23% in July to 35% in October, according to the latest provider sentiment survey from Workthere. The flexible office specialist notes that this increase sits in stark contrast to provider contract occupancy expectation levels, which are down to 68% in October, compared to 71% in July.

In line with the uptick in building occupancy, the survey confirms that enquiry levels for flexible office space in the UK have also continued to rebound up from 45% of normal levels in July to 56% in October. This growth in enquiries has predominantly been driven by demand from businesses looking to downsize from a conventional lease, which accounted for 32% of demand, highlighting the appeal of flexibility as the world takes stock of the last six months and moves towards a new way of working. This growth in UK enquiry levels is also supported on a global scale, which were at 54% of normal levels in October against 44% in July and 20% in April.

Cal Lee, global head of Workthere, comments:

Whilst we have seen a dip in contract occupancy expectations, actual building occupancy and enquiry levels are moving in the right direction and we have seen both steadily increasing since we started our provider sentiment survey in April this year. If these figures continue on the same trajectory, it should result in the market bottoming out, allowing a recovery to begin in the sector. We have talked a lot about the potential of the flexible office moving forward, in particular its ability to capitalise on firms looking to diversify their office portfolio and incorporate more flexibility into their lease terms, we anticipate that this will start to filter through as the market begins to adapt.

Expand the above chart here.

Interestingly, Workthere’s survey showed that in contrast to the respective enquiry and occupancy increases in the UK, overall sentiment from flexible office providers has dropped slightly with 74% positive about the next the next 12 months, compared to 88% in July.  

Jessica Alderson global research analyst at Workthere, says:

Whilst overall sentiment in the UK for the next 12 months is down on July, we think that the ongoing uncertainty regarding Government guidance on local and national movement restrictions has had some impact on this.

How we define ‘good’ in terms of an office has changed significantly over the last six months with a COVID safe environment and flexibility overtaking some of the more luxurious amenities that may have previously been a priority. Whilst the current market is challenging, the very nature of the flexible office sector places it in a strong position moving forward to adapt, evolve and support new and existing real estate strategies.

Find out more about how sentiment in the UK has changed since our first survey in April here.

View the summary of our global results here and take a look at the comparison of sentiment across the different regions here.