Flexible office space is set to almost double in Leeds over the next five years but it’s not all about ‘co-working’, according to a new report published today.
The flex space market is expanding, with growth from both new entrants, such as Yorkshire operator Gilbanks and Wizu Workspace, and more established operators, including Regus and Orega.
Making up 3.8 per cent (455,000 sq ft) of Leeds total office stock in 2018, the proportion of flexible space is set to rise to 6.7 per cent by 2023, according to JLL’s new report ‘Disruption or distraction, where next for the UK flex market sector’.
Jeff Pearey, director in JLL’s Leeds office, said: “In line with some of the other Big 6 regional markets, Leeds has witnessed strong recent flex space activity and the sector has grown noticeably with over 140,000 sq ft transacted over the last two years. We see this set to continue.”
He added: “The much-anticipated commitment of Channel 4 to Majestic is politically resonant, as it endorses Leeds as a major creative industries hub, encouraging supporting companies to follow them, with flex space operators well.”
The report suggests that many operators are changing their strategy in response to increased competition and rising demand for flexible workspace.
But what is driving even greater change in this sector is the fact that landlords and developers are now reacting with their own new concepts.
They are being forced to consider what the rise of the flexible office sector means for their portfolios and how to make sure that their space remains relevant and delivers the best returns.
More landlords are now improving office suites with desks, meeting rooms and data cabling in order to be fully operational at the start of a lease, where previously the space would have been let as empty, open plan space for the occupier to fit out and furnish.
They are also increasingly providing better additional facilities like showers, bike stores and cafes in their buildings.
JLL said at Wellington Place, MEPC has been setting the pace by creating substantial elements of amenity in addition to the office space.
At Kirkstall Forge, developer CEG has established its ‘Forge Studios’ offer with a wide array of amenities available to occupiers.
The report defines flexible office space as any space (desks or more comprehensive office space) provided on short-term leases, at variable prices or alternatively on a membership basis.
JLL’s new report outlines how co-working became fashionable and many operators have frequently used the term to suggest a sense of modernity to their offer.
However, true co-working brands are few and far between and generally have a relatively small footprint.
JLL estimates that co-working operators still make up just eight per cent of the UK’s total flexible office stock.
JLL said new markets for operators will be chosen carefully, operators will not target every city and secondary cities are less likely to see the widespread adoption of flex.
Leeds is however is likely to see a continued rise in both flexible space and co-working thanks in part to the city’s growing tech sector.
Mr Pearey said: “It’s clear flexible office space is here to stay – and we will see more of both serviced offices and shared co-working space as Leeds continues to build its strength in dynamic tech and digital workforce.”