THE HIDDEN VALUE IN FLEXIBLE OFFICE SPACE COMPARED TO CONVENTIONAL LEASED SPACE
Recent data from Instant Offices and Cushman Wakefield found that businesses can save up to 73% by renting coworking or serviced workspace in the world’s major cities. According to the data, the cost of occupying a desk in Hong Kong under a traditional lease arrangement is US$27, 432 per year. This is nearly twice the amount of any other city in Asia and more than 18% more than in London, its nearest global competitor. Instant’s proprietary data, collated from more than 20 years of flexible workspace listings, shows that in comparison, it costs just US$7, 607 per year to rent a desk in a coworking or serviced office space, saving businesses up to 73%.
In London, the average cost of renting a flexible workspace is US$11, 931 a year, more than half the cost (47% cheaper) than the total cost of US$22, 631 for conventional space. The number of flexible workspaces in London grew 20% during 2017 with new centres opening up across the capital. This growth ensured that the market remained highly competitive, particularly compared to conventional space where vacancy rates are at an all-time low and space is at a premium.
John Duckworth, Managing Director of the Instant Group EMEA, said: “It is a commonly held misperception that flexible space, which offers shorter contract lengths and fully serviced offerings, can prove to be a more expensive proposition for a business. But, both the market data and our experience with clients entering the local market, has proven that flexible space is a viable, low-cost alternative.
“In London, we have one of the most mature markets for flexible workspace, but it is still evolving rapidly and in the last two years, in particular, we have seen a real diversity in the type of companies using this space and a wider recognition of its ability to provide a viable long-term solution.”
Flexible vs. Leased: A Comparison of Costs in Major Cities.
Cushman & Wakefield’s research assesses occupancy costs per workstation for prime office space globally, taking into account all workspace costs. Those costs are already included in flexible workspace fees per desk, so this allows us to undertake a like-for-like comparison of workstation costs in conventional space and its flexible alternative.
Hong Kong is one of Asia’s more expensive locations for flexible space, even with the supply of space growing 19% in the last year, but it is still significantly cheaper than the markets of New York and London. However, for businesses entering the Hong Kong market, the total cost of occupancy operates at a large discount in flexible workspace to that of conventional office space.