Supply/demand imbalance pushes up pricing for private desks in UK flex office market, says Workthere

According to Workthere, the average cost of a private desk within flexible office space across the UK during H123 reached £602, which is a 15% increase on the same period in 2022 and surpasses pre-Covid levels by 30%. This rise is reflected in both London and the regions which show a respective rise of 18% (£699) and 35% (£364) per private desk in H1223, compared to pre-Covid levels.  

Workthere notes that the reason for this rise in private desk costs has predominantly driven by an increase in demand for this type of product, with the flexible office specialist’s own enquiries are up 12% yoy and 173% higher than pre-Covid levels, combined with a significant lack of new good quality supply coming into the market in the form of new centres. This is reflected in the fact that take-up from flexible workspace operators remains significantly below the levels seen pre-pandemic.  

Cal Lee, global head of Workthere, comments:

“Increased demand for quality flexible office space in London and across the UK has accelerated the polarisation that we were already seeing in the market which, added to the slower supply pipeline of quality new stock, has resulted in a premium for this product and has pushed up pricing overall as an average.  In addition, we have also seen a need from operators to pass on some of the rising costs they are facing as a result of inflation on energy and staff costs in particular, to their customers. 

“It is however important to note that, whilst demand has been strong, transactions, particularly those above 40 desks, are slower than usual and we are seeing companies talking more time over their occupancy decisions in the current economic climate.” 

Workthere’s research reports that occupancy levels for flexible office space across the UK have remained steady, dropping only by 2% to 88% since December 2022, which has inevitably had very limited downward impact on pricing.