Demand for flexible office space up 69% in first six months of year

There was a 69 per cent increase in the number of flexible office desks leased in the first six months of 2023 compared with the same period last year, according to Workthere.

Workthere, a leading serviced office brokerage and a subsidiary of property adviser Savills, has reported significant growth in the leasing of serviced office space in the first half of 2023 despite the slower broader office market.

According to WeWork, flexible office space is a type of workspace designed to provide employees with a variety of different places and ways to work.

Unlike traditional offices with fixed and assigned desk positions, workers in a flexible office space can choose the area of the office that best suits the type of work they need to do at that moment.

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Workthere said the surge in demand demonstrates a growing confidence in flexible offices, “particularly amidst an evolving business environment”.

Key trends in the Dublin flexible office market for 2023 include a shift in locational focus, term length and sector distribution.

Dublin 2, due to its combined public transport links and adjacent social amenities, continues to be the hotspot for flexible office demand, with 45 per cent of all deals signed to date occurring in buildings on or around St Stephen’s Green. This is up from 33 per cent in the previous year.

Fitzwilliam Square followed next, capturing 18 per cent of deals. Subject to the length of term and quality of the space available, the average desk rate for deals signed in the year to date stands at €580.

The term length of deals also saw a substantial increase from an average of 15 months in 2022 to 21 months so far in 2023. This jump underscores a rising confidence among businesses in the long-term viability of flexible office solutions, the group said.

In terms of sector breakdown, the tech industry, which dominated the flexible office space last year with 66 per cent of deals, currently accounts for 30 per cent of the market.

There has been a notable rise in the professional and financial services sectors, which have respectively taken up 25 per cent each of the flexible office space leased, up from just 12 per cent last year.

Kim Hogan, Workthere lead for Ireland, said: “Although we saw a slow start to the year due to economic uncertainty and rising inflation, deal activity accelerated from February onwards.

“Average occupancy in flexible office buildings now stands at 87 per cent, and we expect to see this continue to rise based on the level of interest we are observing from companies considering the flexible office sector as a practical real-estate solution for their business.”

Workthere said the findings underscore the changing dynamics of Dublin’s flexible office market and the increasing appeal of flexible office solutions across various industry sectors.