The value of Britain’s biggest serviced office companies’ property portfolios has taken its first hit – though it is likely a blip amid years of dramatic growth, according to data.

Portfolio values of flex operators such as WeWork, IWG, The Office Group and others dropped by £1.4bn in the 2020-2021 financial year to £24.3bn, a study by law firm Boodle Hatfield found.

The past five years have still seen the value of property owned by serviced office providers grow by more than 300% from just £5.9bn, including long leaseholds.

That pattern is expected to resume in the coming years. The dip in value was largely as a result of global closures and sell-offs during the pandemic, as the flexible working sector tried to insulate itself from the financial downturn caused by lockdowns.

David Rawlence, Associate at Boodle Hatfield, said: “Despite the doom and gloom surrounding the office sector during Covid, the serviced office sector is leaving the pandemic in a healthy state with a consensus that a hybrid working model will see the sector continue to grow.

“The pandemic also taught a lot of big office occupiers that having the option to increase and decrease their office space quickly is really valuable – that’s exactly what serviced offices sell.

“We expect to see more traditional office landlords expand their own serviced office arms – such as British Land’s Storey brand. As well as more new entries to the market, we are seeing consolidation among existing players as they seek to rapidly scale up.”