London was at the forefront of the global coworking revolution in 2019, with estimates from Coworking Resources revealing the UK capital had seen more openings of new spaces than any other city in the world last year.
However, demand plummeted to 20% of pre-pandemic levels in the UK in April of this year, according to data from Instant Offices, rising to just 25% in June.
Despite this drop, actual occupancy levels remained fairly robust, with Savills’ flexible office advisory division citing only a 15% drop in occupancy between March and June—down to 77% from 92%. This fact negates the assumption by valuers that customers will leave flexible assets during a downturn.
On the contrary, dropping by only 15% in the worst possible recession is very positive, demonstrating a unique and well-positioned resiliency in London in the long term.
London is one of several capital markets to illustrate this surprising trend of occupancy resiliency during Covid-19 and a quick return to high levels of demand. Coworker data shows there was a +420% increase in lead volumes for London this September, despite lows in May.
While most industry experts would agree that markets in APAC (like Hong Kong) have been sturdiest of all, cities in the UK are in better shape than their European peers because they started from a higher base.
By the end of August, operators had expected a contracted occupancy rate of 71%, demonstrating that even if people aren’t going into their coworking offices, they are still paying rent. With resiliency like this, London may even get back to its pre-Covid growth of one new space opening every five days in the city.
Want to learn more?
To gain additional insights about the effects of the pandemic in the world’s leading markets for coworking and explore these trends further, read the full Outlook for Key Markets: 2020 Report here.