The volume of flexible office stock in Edinburgh and Glasgow is set to more than double in the next five years as demand soars under Scotland’s “flex revolution”, new research suggests.
Property consultancy JLL forecasts that “flex” workspaces will account for more than 3 per cent of the total office stock in Edinburgh and around 4 per cent of the overall market in Glasgow by 2023.
It adds that the sector is currently in its early growth stages Scotland’s largest cities, occupying an estimated 1.5 per cent of Edinburgh’s total office stock and 1.6 per cent of that in Glasgow.
In its “Disruption or Distraction” report JLL points to the developing ways of working and rapidly advancing technology as driving demand for alternative workspaces.
Potential cost reductions also make flexible offices increasingly attractive to larger corporations, as well as the traditional market of individuals and small businesses, said the report. These benefits include no commitment to long-term leasing, facility management or a major up-front capital expenditure.
JLL cited the recent decision by US giant WeWork to launch in Edinburgh as the latest indicator of the sector’s strength in the capital. The New York-based operator chose Edinburgh as its third UK city in which to open, unveiling plans for a 46,000 square foot space on George Street to accommodate up to 800 people.
Meanwhile in Glasgow three deals totalling 73,000 square foot were completed for flex space in 2018, the bulk of which saw serviced office provider Regus expand its presence to two further locations, at 1 West Regent Street and 100 West George Street.
JLL director of office agency Mike Buchan said: “Rather than enter into long leases with landlords, flex operators are increasingly looking to offer ‘managed workspaces’, where the space is tailored to the individual occupier’s requirements and all occupational costs are wrapped together with a rentalised fit-out.
“Looking forward, we expect Glasgow’s flex workspace stock to continue to expand.”
Lead director of regional tenant representation Ben Reed said: “Edinburgh’s status as one of the UK’s fastest growing tech hubs is reflected in the diversity of the city’s flex workspace offerings.
“However, supply remains the key stumbling block to any rapid growth in flex stock.”
This comes as renewable energy developer BayWa expands its presence in Edinburgh, moving to a 3,500 sq ft suite in Prospect House.
Sara Dudgeon of CuthbertWhite, acting on behalf of landlord CBRE Global Investors, said: “Many companies in this sector are experiencing rapid growth and therefore seeking additional short term space, in serviced offices.”