Largest increase in London office market supply since 2020

Flexible office marketplace, Rubberdesk, has released its latest Market Report highlighting the largest increase in supply in the London office market since 2020. Q2 saw available space increase by 26 per cent while the number of offices increased by 17 per cent to 3,929 offices. The surge in supply is attributed to the addition of over 10 new offices and the expansion of existing operators in London.

The combined effect of this expanded supply and the prevailing softer market conditions has resulted in a two per cent reduction in the monthly average desk rate, bringing it down to £622 from December 2022 onwards.

Among the notable new additions to the office market is Fora’s impressive 25,000 square feet of office space on Oxford Street. The additional expansion was seen by Operators such as Beaumont, Canvas Offices, Landmark Space, BE Offices, and Uncommon.

Central London maintains its position as the frontrunner in the premium office market, with median monthly prices reaching £695 per desk. This trend is primarily driven by the strong demand in areas like Mayfair, Marylebone, King’s Cross, and Holborn. The flight-to-quality trend is also apparent, as businesses seek out desirable workspaces to foster collaboration and enhance team productivity.

Despite some volatility in Q1, desk prices in East London ended the second quarter at £450 per desk per month, remaining stable overall. However, variations were observed across regions. Shoreditch and Wapping experienced increases of 30 per cent and 13 per cent to reach £762 and £621 per desk, while Spitalfields saw a 10 per cent decrease to £565 per desk.

In contrast, whilst West London saw a 40 per cent increase in office space supply to 353,700 sq ft, desk rates only increased 0.6 per cent to £475 per desk, primarily due to the addition of higher quality offices to the Rubberdesk marketplace.

The report also sheds light on the desk rates in South and North London, which consistently offer the best value at median rates of £240 and £350 per person, respectively. However, these areas present challenges due to limited inventory and a lack of variety, posing constraints for businesses seeking suitable office spaces.

Jim Groves, CEO at Rubberdesk commented: “We have seen a significant shift in the London Flex office market this year. There are more locations available, greater variety and in some cases, very favourable rates. Location and Desirability are top of Tenants’ wish lists as they move to smaller but more engaging workspaces for teams.”

To download the full report click here.