Perspectives 2019

Expanding into regional cities When looking at the growth of coworking and other flexible workspace providers in the UK, there is a temptation to focus on the central London market, where the likes of WeWork, Spaces and The Office Group have transformed provision. However, flexible operators have now started to look to regional UK cities to continue their expansion, with nearly 800,000 sq ft transacted in the eight largest regional cities between 2017 and 2018. This momentum from flexible workspace providers has continued into 2019, with Spaces and WeWork the most acquisitive operators in regional cities so far this year. WeWork have committed to five new locations across Birmingham, Manchester and Edinburgh, whilst Spaces have committed to three additional locations in Bristol, Leeds and Manchester. In total, there has been nearly 510,000 sq ft of new flexible space acquired across the “Big Eight” regional cities so far in 2019, compared to just 360,000 in 2018 and 425,000 in 2017. Leading the way in Manchester The largest transaction to date was Spaces’ 117,000 sq ft acquisition at 125 Deansgate in Manchester, with the new building well placed to benefit from access to the public transport network at nearby Deansgate Station. This is Spaces’ second acquisition in Manchester, adding to their existing units at Peter House. Spaces see huge potential for growth in the demand for flexible office space in Manchester, with total flexible stock in the city forecast to double by 2023. Manchester is now arguably the most mature flexible workspace market outside London, with consistent levels of demand coming from start-ups, SMEs and corporates. Around the country WeWork has also been actively expanding its regional portfolio with a particular focus on Birmingham, where the company has so far acquired a total of over 230,000 sq ft across three different schemes: 97,000 sq ft at 6 Brindley Place, 81,000 sq ft at Louisa Ryland House and 55,000 sq ft at 55 Colmore Row. It has also taken space in Manchester at 75 Mosley Street (51,000 sq ft) and in Edinburgh (44,000 sq ft). In addition, Spaces acquired 23,500 sq ft at 7 Park Row in Leeds – a scheme that has undergone a comprehensive refurbishment. Bristol has been lagging behind the other regional cities in terms of attracting flexible workspace operators at scale, but there are signs that operators are now seeing the city as a growth opportunity. Landmark acquired just over 13,000 sq ft on Avon Street in May 2019, and Spaces also acquired two floors at Programme on All Saints Street (26,500 sq ft). The coworking revolution goes UK-wide Flexible workspaces have experienced huge growth in the capital over the past five years – and now regional cities are seeing their own boom as leading providers expand around the country. # TRENDING 16 #TRENDING By Christopher Dunn , Associate Director, UK Research PERSPECTIVES