The traditional office model is undergoing a fundamental transformation. In London and other major cities, flexible office spaces – also known as serviced offices or co-working hubs – are no longer a niche offering. They have become a mainstream solution for businesses of all sizes, from start-ups to global enterprises. For property investors, this shift represents both a challenge to conventional letting strategies and an exciting opportunity for diversification and growth.

What’s Driving the Trend?

Several key factors have accelerated the demand for flexible workspaces:

• Hybrid working models: Many companies have adopted permanent hybrid setups post-pandemic, meaning they require less square footage but more adaptable layouts.
• Demand for shorter leases: Businesses are seeking flexibility in uncertain markets, opting for short-term commitments over traditional 10-year leases.
• Rise of entrepreneurship: The UK has seen a rise in freelancers and SMEs who prefer cost-effective, shared spaces with built-in amenities.
• Focus on wellbeing and collaboration: Flexible spaces are often designed with modern aesthetics, wellness facilities, breakout zones, and collaboration areas – elements that appeal to a younger workforce.

According to recent surveys, flexible space will account for 30% of total office stock in some global markets by 2030, up from 5–10% today. In London, managed office providers continue to expand their footprint, and landlords are increasingly partnering with these operators – or launching their own flexible brands.

Implications for Property Investors

The growth of flexible workspace models has redefined how office investments are valued and managed. Traditional landlords who offer long-term leases must now compete with operators offering turnkey spaces, enhanced service, and agility.

Key considerations include:

• Income volatility vs. premium rates**: Flexible workspaces can generate higher income per square foot but come with less predictable occupancy patterns.**
• Management complexity: Investors must decide whether to partner with operators or manage flexible spaces directly, which requires expertise in hospitality-style service delivery.
• CapEx requirements: Flex spaces often require higher upfront investment in fit-out, furnishings, and technology.
• Amenity expectations: Tenants now expect high-speed internet, shared kitchens, meeting rooms, concierge services, and wellness zones – all of which must be factored into cost planning.

Strategic Opportunities

Investors with a long-term outlook are increasingly repositioning office assets to accommodate flexible use. Converting underperforming floors in traditional office buildings into hybrid or serviced areas can enhance appeal and broaden the tenant base.

Additionally, location is key. Proximity to transport, cafés, and lifestyle amenities remains a major factor for flex space demand. Mixed-use developments that combine residential, retail, and flexible workspace are also becoming increasingly attractive to occupiers and investors alike.

Tideway works closely with investors and landlords to assess the viability and value of flexible workspace strategies. From design consultation to leasing models and facilities management, we help property owners adapt to the shifting demands of the modern workforce – ensuring your office investments stay relevant, profitable, and competitive.