Flexible office take-up has struggled to take off this year as Covid-19 continues to hit the market.
According to Cushman & Wakefield’s new flexible workspace report, flexible workspace take-up in central London during H1 this year fell by 78% to 260,000 sq ft from 1.2m sq ft the previous year, a record year for the sector.
This has upped supply levels across the city, with 14.3m sq ft of empty space at the end of Q2, equating to a vacancy rate of 5.12%.
In the regional markets, take-up has reached just under 30,000 sq ft so far this year, compared to 530,000 sq ft that was acquired by flex space operators over the whole of last year.
EMEA head of flexible leasing solutions at Cushman & Wakefield Emma Swinnerton said that although it has been a “tough few months” for flex space providers, she anticipated increased occupier demand will “continue to drive growth in the medium-long term”.
She added: “Whilst we believe the long-term fundamentals of the flexible workspace sector are strong, Covid-19 is accelerating changes that we have been seeing in the last 12-18 months.
“In particular, we anticipate a move away from traditional lease arrangements between landlords and operators with these being replaced by partnership and/or self-delivery models more akin to the hospitality sector.”