Workspace market in UK to double in size by 2023

The workspace market in the United Kingdom (UK) has been forecasted to double in size by 2023 according to a recently published report by Statista.

Over the years, the UK coworking market has been touted to be resilient with reports indicating it has more members and active chains long before the inception of spacious coworking platforms that has gained a lots of media attention.

The Statista report which observed the period between 2015 and the first half of 2019 noted that the volume of flexible workspace in the UK increased to about 87 million square feet in 2019.

“The volume of flexible office workspace in the United Kingdom is expected to nearly double between 2019 and 2023, reaching 167 million square feet in 2023.

For clarification, flexible office space is the same as coworking space and shared office space. It is a commercial office space with contracts that permits short-term leases to individuals, freelancers, small and medium enterprises, and other professionals.

The report also clarified that “In contrast to traditional offices, flexible offices provide equipped and serviced office premises without long-term rent commitment.”

Revealing the methodology employed during the research, Statista Research Department noted that it considered more than 22,500 research.

Over 170 industries and markets were tracked every day across 160 countries to compile data for the report. The researchers also evaluated thousands of external sources, reports and databases.

The analyst identified patterns “through a permanent, structured analysis of massive sets of raw data” to identify “the underlying context in data to provide on-point insights”.

The global coworking space market was at $8.1 billion in 2021 and forecasted to grow by $13.35bn in the next 5 years (2021-2025).

A similar report published by Research and Markets which provided “a holistic analysis, market size and forecast, trends, growth drivers, and challenges, as well as vendor analysis covering around 25 vendors” claimed; “market is driven by the advantages of coworking spaces and constant growth of start-ups in developing countries”.

The report also indicated this would mean the market is “progressing at a CAGR of over 11% during the forecast period”.

The coworking spaces market across the world were segmented thus:

 By end-user

• Enterprises and SMEs
• Freelancers and startup

By geographical landscape

• APAC
• Europe
• North America
• South America
• MEA

Major factors propelling nations’ coworking space

COVID-19 is a major contributing factor to the massive rethink of mandatory office appearance. More companies have now embraced a hybrid office model.

A McKinsey report quoted by Kurt Ullman, Director of Franchise Business Development at the International Workplace Group in an interview revealed their will be a four-to-five times increase in the number of people working remotely due to the impact of the pandemic.

“And PwC has looked at surveys and determined that 17% of companies would be going back to work full-time in the office, 13% would give up their offices and go purely remote. And then 70% would take on some form of hybrid work,” Ullman said.

Meanwhile, supportive government programs and policies promoting small-scale businesses were also identified as one of the prime reasons driving the coworking spaces market growth during the next few years.

UK market vs US market

The United States ranks first for the most co-working space with 3,762, India followed with 2,197 and the UK third with 1,044.

Investment opportunity

Although the COVID-19 significantly affected the occupancy of coworking spaces across the world. On average, coworking spaces lost about one-fifth of their normal bookings at the start of 2021 when compared with the start of 2020. This loss was most noticeable in megacities. However, the outlook has changed as countries reopen for business. Despite the pandemic, the number of coworking spaces is forecasted to double by 2024 when compared with 2021.

With the new modus operandi forced on employers due to the COVID-19 pandemic, it is expected that post-COVID, employers are likely to create workplaces near their employees homes, thus creating more customers for coworking space operators. Survey conducted by Prudential revealed more than 68% of employees prefer a hybrid workplace model and most of them favors resuming at a coworking space second to working from home.

However, coworking spaces would not only be competing with themselves alone but also with landlords as many offices are reducing or leasing out spaces that have turned to liability. Most of these landlords, instead of partnering with coworking spaces, are handling things themselves to cut out any middleman. The entrance of landlords into the market should inspire both competition and more acceptability in the corporate world.