The UK flexible office market continues to mature and evolve with the ongoing diversification of products available from the sector, supporting the growth of the industry. Operator take-up recorded at the end of Q3 2025 across the UK reached 593,000 sq ft, which represented a 28% decrease on the same period in 2024 and 14% below the five-year average. The reduction in operator take-up can be partly explained by a fall in new openings across the regional cities. In 2024, this market area experienced its highest level of take-up since 2021, with operators such as Cubo, Gilbanks and Runway East all opening new sites in these markets. The lack of well-located Grade A and prime office supply based in the regional cities has partly constrained operator expansion in 2025.

The average deal size from operators this year has totalled 19,000 sq ft, which is below the long-term average of 24,000 sq ft. There have been no operator transactions over 50,000 sq ft in the first three quarters of 2025, which has resulted in the average deal size falling.

Looking forward, we expect total operator take-up across the UK to reach 900,000 sq ft by the end of 2025, which would be on par with the five-year average.

Central London continues to attract international new entrants

Central London continues to experience the highest volume of operator demand across the UK office market. There has been 383,000 sq ft let to operators in the first three quarters of 2025, the largest transaction being Huckletree leasing 48,000 sq ft at 40 Leadenhall Street. The newly developed scheme achieved practical completion in 2024, and this transaction exemplifies the wider flight to quality in the market.

The UK market continues to attract international new entrants into the sector, underpinned by London’s widely recognised status as the global leader in the provision of flexible office space. This trend was evident when The Work Project opened its first centre in the UK at One Leadenhall. The Singapore-based flex office operator agreed to lease 33,000 sq ft at the newly developed building.

Another Singapore-based operator, Vallist, signed for 32,000 sq ft at Finlaison House, marking its first site in the UK. The maturity of the UK flex market will continue to attract new entrants as well as accommodate the growth plans of residing operators active in the market.

Flight to quality driving desk rates and occupancy

Across the wider UK market, 80% of operator take-up has been located in Grade A assets. Similar to the conventional office market, operators are responding to the demand from customers who are seeking amenity-rich, well-located flexible office space. The sector is able to satisfy this requirement from companies that historically would have occupied space in smaller buildings which don’t contain the comparable level of amenities that are now present in modern, large developments.

This trend is driving pricing within the sector. Workthere reports that average desk rates in London increased to £841 per desk at the end of H1 2025, which represented a 5% growth from the end of 2024. London has the highest average prime desk rate when compared to other global centres, highlighting the maturity and scale of the sector within the capital.

Workthere’s and Great Portland Estate’s ‘London Flex Survey’ highlighted the disconnect between senior leadership and early-career employees' views on office space. Only 55% of early-career professionals viewed their office space as either ‘good’ or ‘very good’, whereas this increased to 81% for those respondents in a senior leadership role. The difference highlights the changing standards and expectations of office space from less experienced staff. Business leaders have been seeking to respond to this demand by improving their working environments, which is further accelerating the flight to quality from operators and customers.

Occupancy rates have benefitted from this trend. According to Workthere, London occupancy increased to 86% at the end of the first half of 2025, which was an improvement on the 82% reported in H1 2024. These statistics suggest that the new wave of flexible space being provided by operators is being absorbed by the market, which bodes well for the continued expansion of the sector. Workthere's Flexmark 5.0 Survey revealed that globally, 85% of operators surveyed expect to expand in 2026, highlighting the sector’s strong health.

Operators are focussing on core locations

A sentiment that has been pronounced in the conventional office market is that occupiers are increasingly unwilling to consider non-core locations. The aforementioned ‘London Flex Survey’ highlighted the importance of proximity to public transport connections, with 84% of respondents reporting it as a top factor in creating an ideal workplace — the second-highest factor overall in the survey. This view is increasingly influencing flex operators' site selections, with prime locations being most actively required. Consequently, larger established office centres are most frequently being targeted by operators, with the demand for suburban locations contracting.

The flex sector historically had limited access to newly developed core-located buildings. However, with landlords increasingly viewing flexible office space as an amenity, this has unlocked the opportunity for smaller companies to be co-located with corporate occupiers. This sentiment from landlords will support the growth of operators situated in prime locations and drive desk price growth for those prime centres.

Management agreements are the preferred growth model for operators

Management agreements (including hybrid leases) have continued to increase in popularity amongst operators and landlords. At the end of Q3 2025, 53% of operator transactions were using a management agreement deal structure, which is the highest proportion recorded when compared to the last five years.

This trend is expected to continue, notably for grade A assets, with the proportion rising to 55%.

The ability for both landlords and operators to benefit from the expansion of the flex market, evidenced by the rising occupancy levels, has supported the growth of the management agreement structure. This model enables rapid expansion for operators with minimal capital outlay required. Landlords are able to influence space design and fit-out.

Looking forward, operators are increasingly seeking to adopt this deal structure in their expansion plans. Workthere's Flexmark 5.0 Survey revealed that 78% of UK operators prefer to use management agreements as a growth model in their expansion programmes, which is an increase from 45% in 2023.

Demand for fitted space is bridging the gap between the flex and conventional office sectors

The ongoing integration of the flexible office sector into the wider conventional office market is being accelerated by the demand for fitted space. At the end of H1 2025, 72% of lettings below 5,000 sq ft in the conventional office market across central London were on a fitted basis. Increasingly, fitted space in the conventional office market is also being marketed at managed space requirements from the flex sector. This trend is expected to continue, with landlords seeking to provide additional managed services to historically marketed fitted space. Consequently, delineating between managed and fitted space products is expected to become more challenging and further integrate the historically separated sectors.