Table of Contents
Overview
-
- What you need to know
- Covered in this Report
Executive Summary
-
- The market
- Growth in UK serviced offices market continues at pace
-
- Figure 1: UK market for serviced offices, 2013-18
- Growth in start-ups is driving and shaping demand for flexible work spaces
-
- Figure 2: Number of newly incorporated companies in the UK, Q1 2015-Q2 2018
- Growing trend towards hybrid offices
- Number of serviced offices expected to rise by 39% between 2018 and 2023
-
- Figure 3: Forecast number of UK services offices, 2019-23
- Companies and brands
- IWG remains largest player in UK serviced offices market but feels heat from new, agile market entrants
-
- Figure 4: UK serviced office providers, by number of locations, 2018
- What we think
Issues and Insights
-
- Trend towards flexible working set to continue to drive and shape demand for serviced offices
- The facts
- The implications
- Growing number of traditional property owners are exploring serviced offices to diversify their portfolios
- 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 drive and shape demand for flexible work spaces
- Number of serviced offices expected to rise by 39% between 2018 and 2023
Market Size
-
- Introduction
- The customer
- The supplier
- Continued growth across UK serviced offices market
-
- Figure 5: UK market for serviced offices, 2013-18
- Figure 6: UK market for serviced offices, 2013-18
- Growth is spreading to regional hubs
-
- Figure 7: UK market for serviced offices, by city, 2017
- Figure 8: UK market for serviced offices, by city (excl. London), 2017
Market Forecast
-
- Increased demand for flexibility from start-ups, SMEs, and large corporations will remain a key driver of growth in the serviced offices market
- Competition set to intensify
- Number of serviced offices expected to rise by 39% between 2018 and 2023
-
- Figure 9: Forecast number of UK services offices, 2019-23
- Figure 10: Forecast number of UK serviced offices, 2019-23
The Impact of the Economy
-
- UK economy continues steady growth despite Brexit uncertainties
-
- Figure 11: Growth in UK economic output, Q1 2014-Q2 2018
- Figure 12: Growth in UK economic output, Q1 2014-Q2 2018
-
- Figure 13: Forecast GDP development. 2017-22
- Falling business confidence raises some concerns
-
- Figure 14: Business confidence index, per half-year, 2007-17
- Figure 15: Business confidence index, per-half-year, 2009-18
Market Trends
-
- Trend towards hybrid workspaces set to continue
- Providers look to enhance service offering as industry moves towards “space as a service” model
- Promotion of collaborative and community-driven values
- Non-office buildings become flexible work spaces
Market Drivers
-
- Overview
- Trend towards shorter and more flexible office lease structures
- Remote working on the rise as flexible working practices and self-employment increase
-
- Figure 16: Number of home workers in the UK, January to March, 2012-17
-
- Figure 17: Number of homeworkers in the UK, January to March, 2013-17
- Rapid rise in self-employment since 2008
-
- Figure 18: Self-employed workers in the UK, 2006-17
- Growth in start-ups, especially in tech sector, are driving and shaping demand for flexible work spaces
-
- Figure 19: Number of newly incorporated companies in the UK, Q1 2015-Q2 2018
- Figure 20: Number of newly incorporated companies in the UK, Q1 2015-Q2 2018
-
- Figure 21: Business start-ups in the UK, by sector, 2015-16
-
- Figure 22: Business start-ups in the UK, by region, 2012-16
- Dominance of millennials in the workplace will dictate future space design
- New lease accounting standard is likely to boost demand for flexible workplaces
- Uncertainty surrounding Brexit leads to increased demand for flexible workspace
- Business rates revaluation has biggest impact on London office sector
- Key regional cities increasingly drive growth in serviced offices market
-
- Figure 23: Average workstation rates in key cities the UK, by city, 2017
- Figure 24: Average workstation rates in key cities the UK, by city, 2017
- Prices continue to rise across the commercial property rental sector
-
- Figure 25: Price index for companies operating in the property rentals industry, Q1 2013-Q2 2018
- Figure 26: Price index for companies operating in the property rentals industry, Q1 2013-Q2 2018
Companies and Brands – What You Need to Know
-
- Traditional serviced office providers adopt new business models in response to changing workspace needs
- IWG remains largest player in UK serviced offices market
- WeWork increasingly targets larger companies to challenge traditional landlords
- Increasing number of providers now provide hybrid offices
Industry Structure
-
- Industry development
- Traditional serviced office providers adopt new business models in response to changing workspace needs
- IWG remains largest player in UK serviced offices market but feels heat from new, agile entrants
-
- Figure 27: UK serviced office providers, by number of locations, 2018
- Figure 28: UK serviced office providers, by number of locations, 2018
- Rising demand for flexible workspace drives acquisitional activity
- Growing number of traditional property owners are exploring serviced offices to diversify their portfolio
- Institutional investors start to see the opportunities offered by serviced offices
Competitive Strategies
-
- Acquisitional activity and consolidation
- I2 Office buys rival serviced office group Landmark and subsequently rebrands its network as Landmark
- IWG (formerly Regus) uses acquisitional route to move into co-working sector and expand its product offering
- Portfolio differentiation and diversification
- WeWork increasingly targets larger companies to challenge traditional landlords
- Bruntwood focusses on key regional markets it knows and owns a concentrated portfolio in markets where ownership is otherwise fragmented
- Citibase focusses on cost-conscious small businesses across UK towns and cities
Company Profiles
-
- Bizspace
- Recent company activity
- Company strategy
- Financial performance
-
- Figure 29: Financial analysis of Bizspace, 2013-17
- Bruntwood
- Company strategy
- Financial performance
-
- Figure 30: Financial analysis of Bruntwood Group, 2013-17
- Citibase
- Corporate restructure
- Company strategy
- Financial performance
-
- Figure 31: Financial analysis of CBLH, 2013-17
- Landmark Space (formerly i2 Office)
- Company strategy
- Financial performance
-
- Figure 32: Financial analysis of Landmark Space, 2013-17
- London Executive Offices
- Company strategy
- Financial performance
-
- Figure 33: Financial analysis of London Executive Offices, 2013-17
- IWG/Regus
- Company strategy
- Financial performance
-
- Figure 34: Financial analysis of IWG plc, 2013-17
-
- Figure 35: Geographic turnover analysis of IWG plc, 2015-17
- WeWork
- WeWork is now London’s largest private renter of offices
- WeWork increasingly targets larger companies to challenge traditional landlords
- Financial performance
-
- Figure 36: Financial analysis of WeWork, UK, 2014-16
Appendix – Data Sources, Abbreviations and Supporting Information
-
- Abbreviations
- Methodology
Further Sources and Contacts
-
- Trade associations
- Business Centres Association
- Trade magazines
- Commercial Property Monthly
- Estates Gazette
- Property Week
- Trade events
- Work 2.0 2019
Back to top