Susannah Streeter, Senior investment and markets analyst at Hargreaves Lansdown, comments on the pre-pandemic level demand for WorkSpace’s flexible offices as London opens up again.
‘’The advent of ‘Freedom Day’ appears to have brought liberation from the shackles of the pandemic for WorkSpace, with the number of enquiries for flexible business space rebounding to pre-pandemic levels.
It’s another sign that London is opening up, with more workers beginning to return to offices, joining the retail labour force. The prospect of more passing trade and higher overall footfall is clearly giving small businesses the confidence to dip their toe into trading once more. There were on average 947 enquiries per month in the quarter, compared to 506 a year ago, and like-for like occupancy rose 1.1% over the quarter to 82.7%
The painful need to slash the cost of leases to get customers through the door is also ebbing away. Prices have been stabilising as demand returns, and although average rent per square foot is down by 2.4%, it’s around half the fall seen in the previous quarter.
The gradual shift out of home working has begun again, and the hybrid approach will offer some long-term opportunities. Younger employees with little prospect of a regular desk in the office, may opt for a seat in one of WorkSpace’s shared offices, instead of working from the kitchen table for the foreseeable future.
The flexibility at the heart of the WorkSpace concept should give it an edge. It also offers short term rentals of meeting rooms with on-site cafes and photographic studios, which benefit start-ups, who are in need a location to meet new clients but are fearful of taking on a longer-term lease. Its centres still need a big shove to be firing on all cylinders once more. Recovery is still slow here with occupancy creeping up from 20% of pre-Covid levels in March to 35% by the end of June.
Concerns about rising infection rates and the spread of new variants may also limit take up of new leases and rentals so there is still a challenging road to recovery ahead.’’