London flex office prices increase as occupiers reinvest in central office space

A new report from flexible office marketplace, Rubberdesk, shows that increasing demand for serviced offices pushed prices up across the greater London region by 3.4% QoQ to £690 per month.

Rubberdesk’s June 2022 London Flexible Office Market Report reveals Central London is the most expensive and in-demand district to rent an office, seeing a 1.1 per cent increase in the median price, and a 5.6 per cent drop in vacant office space QoQ. Southwark represents the best value at £704 per desk while demand for space in Westminster has pushed rents up 7.9 per cent to £830 per desk per month.

The City of London highlights key trends observed amongst businesses seeking flexible office space, where demand for quality offices with premium amenities has been high. Rates in the City of London edged up 1.5 per cent QoQ to a median price of £745 per desk per month.

By district, South London offers the best value for serviced office space, with a median monthly rate of £300 per person. Followed by North London at a median of £395 and West London at £450. Across East London, the cost of office space has jumped 3.5 per cent with a monthly median of £592 per person.

Despite a 2.4 per cent decrease in available space since March 2022, London has experienced a significant supply of new workspaces over the past three months with serviced office operators such as The Office Group, Situu, Storey, Workpad, The Boutique Workspace, Foraspace as well as others who have opened over 20 new spaces across London with another five to come over the coming months.

Commenting on the findings, Jim Groves, CEO of Rubberdesk, said: “The London Flex office market has seen a raft of new centres open over the last six months, with more to come, but it’s not been enough to satisfy business demand. The substantial quarterly increase in London’s cost of office space marks a long awaited reversal to the pandemic’s downward trend.” 

Laura O’Sullivan, Rubberdesk’s Flexible Space Specialist for the UK and Ireland, added: “Pockets of London like Paddington and Farringdon are booming as the new Elizabeth line means shorter journey times between popular sought after destinations. Demand will continue to strengthen and the flight to quality will remain a key driver for businesses resulting in upwards pressure on prices.”