Flexible office space is set to double in Bristol over the next five years, according to research from global property consultants JLL, but it’s not all about ‘co-working’.
The flex space market is expanding, with growth from both new entrants such as Bristol’s new and highly successful Runway East and established operators including Regus and Desklodge.
Making up just 2.4% (323,000 sq ft) of Bristol’s total office stock in 2018, the proportion of flexible space is set to raise to 4.7% by 2023, as outlined in JLL’s new report ‘Disruption or distraction, where next for the UK flex market sector’.
Many operators are changing their strategy in response to increased competition and rising demand for flexible workspace. But what is driving even greater change is the fact that landlords and developers are now reacting with their own new concepts.
They are being forced to consider what the rise of the flexible office sector means for their portfolios and how to make sure that their space remains relevant and delivers the best returns.
More landlords are now improving office suites with desks, meeting rooms and data cabling in order to be fully operational at the start of a lease, where previously the space would have been let as empty, open plan space for the occupier to fit out and furnish. They are also increasingly providing better additional facilities like showers, bike stores and cafes in their buildings.
Legal & General’s current redevelopment at The Landing, Redcliff Street Bristol is a prime example. Opening soon, the newly refurbished office will offer stylish, flexible space to occupiers looking for open, flexible, co-working style environment.
This has been a growing trend for many years, starting with serviced offices in the mid-1980s, while co-working took off after the financial crisis and offered a completely new style of working designed to encourage collaboration, knowledge sharing and innovation in an open and creative space.
The new report outlines how co-working essentially became fashionable and many operators have frequently used the term to suggest a sense of modernity to their offer. However, true co-working brands are few and far between and generally have a relatively small footprint. JLL estimates that co-working operators make up just 8% of the UK’s total flexible office stock.
Bristol however is likely to see a continued rise in both flexible space and co-working thanks in part to the city’s growing tech sector.
Hannah Waterhouse, director in JLL’s Bristol office, said:
“Bristol is high on operators’ list of priorities – and expansion is expected over the next 12 months with a number of new centres already committed to opening this year. The city has suffered from a shortage of office supply in recent years which is now being addressed with close to 300,000 sq ft of new build space currently under construction.
“While much of Bristol’s flex space has been traditional serviced offices there is growing demand for co-working space on the back of the city’s creative community and fast-growing tech sector.
“We are seeing that clearly with the success of new spaces like Runway East, one of the largest co-working offices outside London. It offers flexibility in all senses – from the space, design and atmosphere to the pricing and terms of the contract – and is full after opening just 12 months ago.
“A few doors down the road, Legal & General are putting the final touches to The Landing, opening soon, leading the charge to attract tenants back from the likes of Runway East by offering very cool furnished and cabled office space.
“It’s clear flexible office space is here to stay – and we will see more of both serviced offices and shared co-working space as Bristol continues to build its strength in tech and professional services.”
Regus & Runway East, which selected Bristol as its first location outside of London, have both secured units over 30,000 sq ft in recent years. Origin Workspace opened phase 1 of its 42,000 sq ft facility in May this year and is already 85% occupied with phase 2 due to complete later this year.