The UK Business Centre Market is enjoying growth despite increasing competition and a jittery economy, according to a new report.
The Business Centre Association, in collaboration with CBRE, are delighted to publish a combined third and fourth annual UK Business Centre Market Report, which provides definitive analysis into the performance of flexible workspace providers in 2015 and 2016.
This definitive and market leading analysis covers data from over 600 business centres across the UK, representing around 23% of the total market place and paints a positive picture of the growth of our sector. Flexible workspace providers are, according to our report, robust and resilient in the face of increasing levels of competition as well as changing customer requirements for space, and the political and economic factors that have made many businesses elsewhere in the UK economy extremely jittery.
The report shows that there was a 11% growth in the number of workers based in business centres in 2016, with provider turnover up an additional 13% as well. This growth has come at a time when 90 new centres have opened across the country, and when competition has intensified with existing providers scaling up, and new entrants examining the prospects for new flexible space services.
Talking of new entrants into the sector, we could not have published this at a more interesting time. In June 2017, there were several major announcements in the sector that substantiate the positive trends the report has identified from the last two years of data. Perhaps most eye-catching of these announcements was Blackstone’s acquisition of a majority stake in BCA member, The Office Group for £500m. Our sector is increasingly maturing as time goes by, and Blackstone’s acquisition typifies that. This news, combined with the announcement that British Land are launching a new flexible workspace brand, Storey, is a huge vote of confidence in the future of our sector.
Moving back to the report, utilising the data supplied by BCA members and interpreted by CBRE, we can confidently say that our sector supports around £18bn worth of UK GDP, through the provision of flexible space for 93,000 businesses employing over 480,000 people. That is up by around 13,000 businesses and 80,000 since we published the first set of figures for 2013.
The future of our sector will be shaped, to a certain extent, by Brexit which has come to dominate political and economic discourse since the referendum result. The report tested the impact operators felt the referendum result had on their business and whilst 38% said there had been a negative effect, a further 62% stated that it either had no effect, or a positive effect on their business. With existing high levels of demand from small businesses, the sectors key customer base looks resilient in the face of complex political and regulatory change that has yet to come.
With the publication of this report, the BCA and CBRE have now built up four years worth of data on the UK flexible workspace sector. The hard facts tell the real story – our members continue to grow and make a fantastic contribution to UK PLC, in terms of their own turnover and the billions of pounds of GDP they support in their spaces. Traditional landlords are now following the lead of our members in looking to deliver the flexible models of commercial space delivery.
If the data for the next four years continues to follow the trend, it will not be long before our sector is home to more than 100,000 businesses and well over half a million workers. That is an exciting prospect for all who are immersed in the sector.
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If you would like a copy of the report, please contact the BCA +44(0)20 8387 1444