There are a number of misconceptions that dominate much of the writing around flexible workspace, despite all the press coverage and discussion around coworking over the last two years. Yet even in this comparatively short space of time, a number of misconceptions about the market have managed to take hold. Some of them are intuitive but wrong to some or other degree. Some are distorted by coverage. Some arise for other reasons. And we know this thanks to the extensive data gathered in Instant’s latest market report. So here in this piece, I am going to try to shatter some of the myths around flex workspace and coworking in particular.
The market is becoming MORE Fragmented rather than dominated by the big operators.
The number of flex workspace centres – providing serviced, co-working or hybrid space – run by smaller independent operators has grown to encapsulate 83 percent of the London market. There has been significant interest and focus on the larger operators like WeWork, IWG, The Office Group, etc. despite them only making up a fraction of the sector. But the market share of the top 10 operators by size is actually decreasing as smaller players join this ever-evolving market and look to provide more diverse varieties of space.
Suburban markets are growing but flex space is STILL a central business resource
As the industry matures we have begun to see a gradual expansion out of the central business districts of the UK’s major cities and into satellite towns and the surrounding areas. But despite this slow encroachment into new suburban markets, the focus of the industry and the majority of supply remains within central business districts.
The UKs three largest cities still account for 30 percent of the total flexible supply within the UK – and that supply is focused over 1 or 2 central square miles of city markets. In London, 21 percent of supply is still found within the central postcodes of EC and WC. This trend is even more pronounced in the UK’s second cities where over 50 percent of supply remains focused around the central business areas. But this doesn’t mean that client demand is not growing in suburban locations. Client enquiries are increasing but the market supply just isn’t there yet.