Banks' dominance of London office space is over
Co-working and flexible office providers have for the first time surpassed banks and technology companies as the largest source of demand for central London offices.
Firms including WeWork Cos. and The Office Group (TOG), acquired last month by Blackstone Group LP, leased a record 82,000 sq m (884,000 sq ft) of workspace in the six months through June, according to Cushman & Wakefield Inc. That's 18.3pc of all the space leased in the period and surpasses the volume the firms agreed to occupy last year.
Blackstone's acquisition of TOG puts it in a powerful position within the flexible office space market. Established in 2003, TOG introduced the concept to Britain, and caters currently to more than 15,000 members, which include AOL, Pinterest, British Gas, and of course, start-ups.
Referring to the prospects for the flexible office space market generally, Bloomberg Intelligence analyst Sue Munden said: "Uncertainty in the UK leading up to Brexit means that many occupiers may want some flexibility in their office space capacity."
The volume of space leased in central London rose 10pc from a year earlier to 446,000 sq m (4.8m sq ft) in the first half, according to Cushman & Wakefield.