Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept & Close

Serviced Offices - UK - October 2019

What you need to know

The serviced office industry is one of the fastest growing sectors in the UK property market. Since the global recession, many businesses have started using serviced offices because of their cost efficiency, flexibility and practicality.

In London and key regional cities, serviced office providers are now competing with an explosion of co-working spaces from the likes of WeWork, Workspace and TOG. Many co-working brands offer additional perks and professional and social events, which help to develop a strong community to support collaboration. In response to the increased popularity of co-working spaces, traditional serviced office providers have had to innovate and diversify their offerings to create clearer and more distinctive customer offers

“In the short term, demand for flexible workspaces is expected to be boosted by the introduction of the new international accounting standard IFRS 16 in January 2019. Under the new accounting standard, lease contracts will have to be reported as liabilities in company accounts and can no longer be hidden. However, leases shorter than 12 months can be excluded from IFRS 16, which is expected to increase demand for flexible workplaces as there will not be a requirement to capitalise the rental liability on the occupier’s balance sheet.”
– Claudia Preedy, B2B Analyst

This Report covers the following areas:

  • Growing number of landlords are looking to incorporate flexible workspaces into their portfolios
  • Demand for serviced offices set to continue to be driven by trend towards more flexible and agile workspaces

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • UK serviced offices market enjoys strong growth
              • Figure 1: UK market for serviced offices, 2014-19
            • Regional expansion of flexible workspace operators
              • Growth in start-ups, especially in tech sector, represents key driver for flexible workspace demand
                • Figure 2: Number of newly incorporated companies in the UK, 2013 - 19
              • Number of serviced offices expected to rise by 30% between 2019 and 2024
                  • Figure 3: Forecast number of UK serviced offices, 2020-24
                • Companies and brands
                  • IWG remains largest player but is facing increased competition from new entrants
                      • Figure 4: UK serviced office providers, by number of locations, 2019
                    • What we think
                    • Issues and Insights

                      • Growing number of landlords are looking to incorporate flexible workspaces into their portfolios
                        • The facts
                          • The implications
                            • Demand for serviced offices set to continue to be driven by trend towards more flexible and agile workspaces
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Increased demand for flexibility drives growth in UK serviced offices market
                                    • Growth in start-ups, especially in tech sector, represents key driver for flexible workspace demand
                                      • Number of serviced offices expected to rise by 30% between 2019 and 2024
                                      • Market Size

                                        • Introduction
                                          • The customer
                                            • The supplier
                                              • UK serviced offices market enjoys strong growth
                                                  • Figure 5: UK market for serviced offices, 2015-19
                                                  • Figure 6: UK market for serviced offices, 2014-19
                                                • Regional expansion of flexible workspace operators
                                                  • Increased competition to exert downward pressure on desk prices
                                                    • Figure 7: Average workstation rates in key UK cities, by city, 2017
                                                    • Figure 8: Average workstation rates in key UK cities, by city, 2017
                                                • Market Forecast

                                                  • Providers need to differentiate to stay ahead
                                                    • Number of serviced offices expected to rise by 30% between 2019 and 2024
                                                        • Figure 9: Forecast number of UK serviced offices, 2020-24
                                                        • Figure 10: Forecast number of UK serviced offices, 2020-24
                                                    • The Impact of the Economy

                                                      • Annual GDP growth falls to six-year low in 2018
                                                        • Figure 11: Annual GDP growth rate, 2014-18, (%)
                                                      • GDP growth expected to remain subdued in 2019 and 2020
                                                          • Figure 12: Forecast GDP development, 2017-23
                                                        • Business confidence remains low
                                                          • Figure 13: Business confidence index, Q1 2018-Q2 2019
                                                      • Market Trends

                                                        • Hybrid model accounts for nearly half of all flexible space in the UK
                                                          • Emergence of specialists and niche players
                                                            • ‘Space as a service’ model
                                                              • Globalisation of flexible workspace providers
                                                                • Promotion of collaborative and community-driven values
                                                                • Market Drivers

                                                                  • Overview
                                                                    • Trend towards shorter and more flexible office lease structures continues
                                                                      • Remote working on the rise as flexible working practices and self-employment increase
                                                                        • Figure 14: Number of homeworkers in the UK, January to March, 2012-18
                                                                        • Figure 15: Number of homeworkers in the UK, 2014-18
                                                                      • Self-employment levels have surged in the last 10 years
                                                                          • Figure 16: Self-employed workers in the UK, 2010-18
                                                                        • Growth in start-ups, especially in tech sector, represents key driver for flexible workspace demand
                                                                            • Figure 17: Number of newly incorporated companies in the UK, Q1 2016-Q1 2019
                                                                            • Figure 18: Number of newly incorporated companies in the UK, 2013-19, (000s)
                                                                            • Figure 19: Business start-ups in the UK, by sector, 2015-16
                                                                            • Figure 20: Business start-ups in the UK, by region, 2013-17
                                                                          • Millennials increasingly dictate flexible workspace design, but providers must cater for a fully diverse workforce
                                                                            • New lease accounting standard expected to boost demand for flexible workplaces
                                                                              • Brexit uncertainty provides positive impetus for flexible workspace demand in short term
                                                                                • Prices continue to rise across the office rental sector
                                                                                    • Figure 21: Price index for companies operating in the property rentals industry, Q1 2014-Q2 2018
                                                                                    • Figure 22: Price index for companies operating in the property rentals industry, Q1 2014-Q2 2019
                                                                                • Companies and Brands – What You Need to Know

                                                                                  • Traditional serviced office providers diversify portfolios to incorporate more co-working and flexible workspaces
                                                                                    • Increasing number of providers now provide hybrid offices
                                                                                      • IWG opts for franchising strategy to accelerate growth
                                                                                        • WeWork increasingly targets larger companies to challenge traditional landlords
                                                                                        • Industry Structure

                                                                                          • Industry development
                                                                                            • Traditional serviced office providers diversify portfolios to incorporate more co-working and flexible workspaces
                                                                                              • Rise in hybrid offices
                                                                                                • IWG remains largest player but faces increased competition from new entrants
                                                                                                    • Figure 23: UK serviced office providers, by number of locations, 2019
                                                                                                    • Figure 24: UK serviced office providers, by number of locations, 2019
                                                                                                  • Consolidation and acquisition activity
                                                                                                    • Growing number of traditional property owners and landlords are entering flexible workspace market
                                                                                                      • Institutional investors start to see the opportunities offered by serviced offices
                                                                                                      • Competitive Strategies

                                                                                                        • Acquisition activity
                                                                                                          • Newable acquires Citibase to build “one-stop shop” for SMEs
                                                                                                            • IWG/Regus has built multi-brand portfolio through acquisitions
                                                                                                              • IWG opts for franchising strategy to accelerate growth
                                                                                                                • Diversification and differentiation
                                                                                                                  • WeWork increasingly targets larger companies to challenge traditional landlords
                                                                                                                    • Bruntwood focusses on key regional markets
                                                                                                                      • LEO focusses on high quality accommodation in prime central London locations
                                                                                                                        • Digital activity
                                                                                                                          • IWG invests in new apps and disruptive technology
                                                                                                                            • WeWork revamps its member app to better serve customer requirements
                                                                                                                            • Company Profiles

                                                                                                                              • Bizspace
                                                                                                                                • Company strategy
                                                                                                                                  • Financial performance
                                                                                                                                    • Figure 25: Financial analysis of Bizspace, 2014-18
                                                                                                                                  • Bruntwood
                                                                                                                                    • Company strategy
                                                                                                                                      • Financial performance
                                                                                                                                        • Figure 26: Financial analysis of Bruntwood Group, 2014-18
                                                                                                                                      • Citibase
                                                                                                                                        • Corporate restructure
                                                                                                                                          • Acquisition by Newable in November 2018
                                                                                                                                            • Company strategy
                                                                                                                                              • Financial performance
                                                                                                                                                • Figure 27: Financial analysis of CBLH, 2015-19
                                                                                                                                              • Landmark Space (formerly i2 Office)
                                                                                                                                                • Company strategy
                                                                                                                                                  • Financial performance
                                                                                                                                                    • Figure 28: Financial analysis of Landmark Space, 2013-17
                                                                                                                                                  • London Executive Offices
                                                                                                                                                    • Company strategy
                                                                                                                                                      • Financial performance
                                                                                                                                                        • Figure 29: Financial analysis of London Executive Offices, 2014-18
                                                                                                                                                      • IWG/Regus
                                                                                                                                                        • Recent acquisitional activity
                                                                                                                                                          • IWG opts for franchising strategy to accelerate growth
                                                                                                                                                            • Financial performance
                                                                                                                                                              • Figure 30: Financial analysis of IWG plc, 2014-18
                                                                                                                                                              • Figure 31: Geographic turnover analysis of IWG plc, 2016-18
                                                                                                                                                            • WeWork
                                                                                                                                                              • WeWork increasingly targets larger companies to challenge traditional landlords
                                                                                                                                                                • UK property acquisitions
                                                                                                                                                                  • WeWork’s take-up of London office space almost haves in 2018
                                                                                                                                                                    • Financial performance
                                                                                                                                                                      • Figure 32: Financial analysis of WeWork, International, 2015-17
                                                                                                                                                                  • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                                                                      • Abbreviations
                                                                                                                                                                        • Methodology
                                                                                                                                                                        • Further Sources and Contacts

                                                                                                                                                                          • Trade associations
                                                                                                                                                                            • Flexible Space Association (formerly Business Centre Association)
                                                                                                                                                                              • Trade magazines
                                                                                                                                                                                • Commercial Property Monthly
                                                                                                                                                                                  • Estates Gazette
                                                                                                                                                                                    • Property Week

                                                                                                                                                                                    Serviced Offices - UK - October 2019

                                                                                                                                                                                    £995.00 (Excl.Tax)