Rubberdesk's new London Flexible Office Report reveals that although office space prices showed promising signs in the first half of 2022, rates quickly tumbled in the 2nd half. Inflation, rising interest rates, the war in Ukraine, and market anxiety all contributed to prices dropping to their lowest level in 3 years - £600 per desk - before recovering slightly to £635 by year-end.
We expect to see more first-time Flex tenants, a continued flight to quality, and with that higher rates in the most desirable locations in 2023.
The report details that office space in Central London continued to lead prices higher with median prices reaching £700 per desk. Popular areas such as SOHO, Holborn and Fitzrovia are driving this demand, offering a wide range of premium office spaces.
Jim Groves, Rubberdesk CEO, comments:
“Throughout 2022 Flex office space filled and occupancy steadily increased as more businesses returned from home or exited leases and looked for new premises.
Agility and scalability were recurring themes from tenants as businesses faced volatile markets and uncertain conditions. Quality was another key requirement of tenant briefs where the benefits of the office plus the commute needed to exceed the ease of staying at home for employees.”
The report also highlights that London's East End offers great value for money with monthly desk rates of £663 and £650 in Shoreditch and Aldgate 7% lower than the median rate in Central London.
West London's Hammersmith and Fulham area also provides a wide variety of offices within close proximity to the city at an even more competitive price of £450 per person per month. Meanwhile South and North London both offer cost-effective options with a median desk rate of £270 and £395 respectively.
London Experiences 24% Decrease in Office Vacancy and Over 30 New Workspaces Open Among Leading Serviced Office Operators
Amidst a 24% decrease in office availability since January 2022, London has also seen a significant influx of new workspaces throughout the year, including The Office Group’s Black & White Building, Central London’s tallest mass timber office building, as well as new offerings from Storey, Workpad, The Boutique Workspace, Foraspace and over 30 other operators.
Mr. Groves also suggested what 2023 could bring,
“We expect to see more first-time Flex tenants, a continued flight to quality, and with that higher rates in the most desirable locations."
Key Findings:
Office rates slid 3.4% in Central London
City of London office prices hit a new low in 2nd half of 2022
Office prices in Aldgate and Canary Wharf in East London rise over 10%
Office availability in South London increased by 15% with median rates of £287 per desk
Rates across West London dropped 6.5% year over year
North London prices climbed 5.3% in 2022
About Rubberdesk
Rubberdesk (www.rubberdesk.co.uk) is the UK’s flexible office marketplace with thousands of fully furnished serviced offices and coworking desks ready for you to move in and rent by the month or year. Since launching in the UK in early 2020, the Rubberdesk platform now offers over 7,000 offices and an estimated 6 million sq. ft. of space with a capacity for 115,000 people.
Rubberdesk’s proprietary platform combined with industry insights from their office specialists helps customers find the best office for their unique needs. With a view across all available options, they simplify the process to create a bespoke shortlist, arranging tours and negotiating the best deals. All for free and without obligation.
Rubberdesk also operates in Australia (www.rubberdesk.com.au) and Ireland (www.rubberdesk.ie).
