Take-up of flexible workspace soared in H1 2024, according to the latest data from Savills and its specialist flexible office division Workthere.

In the first six months of the year, take-up of flex space reached 642,000 sq ft – 39% above the same period in H1 2023 and the highest H1 figure since 2019.

Savills and Workthere attribute the flex sector’s strong performance in part to soaring venture capitalist investment into UK start-ups. To the end of August, VC investment volumes into UK start-ups reached £362m – considerably up on the 10-year average

Entertainment software businesses – driven by AI growth – have accounted for £57m of VC investment activity so far in 2024, with business/productivity software (£53m) and biotechnology (£39m) ranking second and third, respectively.

Simon Preece, commercial research analyst at Savills, said: “VC investment is integral to those start-ups businesses looking to grow in terms of turnover, headcount and expansion. It is in these latter categories in particular where we often see a link to the flexible office market, as it is usually this space that provides a starting point for many start-ups, and indeed offers an environment for them to scale on flexible terms. It is therefore no surprise to see a surge in VC investment into start-ups correlate with a rise in flexible office take-ups from providers and operators cross the UK.”

Tom Leahy, co-head of Workthere, added: “With investment into start-ups this year already looking strong against the spike in 2023, we would expect this to continue to translate into robust take-up activity in the flex sector, which combined with an increase in enterprise deals from larger corporate occupiers who are seeking to increase to proportion of their real estate portfolio into flex space, presents a strong case for continued growth in the flex sector.

“Across our managed office portfolio we have seen continued year-on-year transaction volumes from start-up and growth companies as they drive towards acquiring their own self-contained space that is of a high-quality whilst retaining flexible terms and a hospitality-led service.”