Hybrid work models: balancing flexibility with growth in office space demand in the uk

The COVID-19 pandemic completely transformed the way businesses operate, and companies were forced to adopt remote work on a much larger scale. The once-solid concept of the office space had to shift. Enter the hybrid work model! This shift has had a major impact on the demand for office space in the UK, creating both challenges and exciting opportunities for businesses and the commercial real estate market.

The rise of hybrid work models

Hybrid work models are really taking off, and it’s not hard to see why. For employees, the perks are huge—less time spent commuting, a better work-life balance, and more control over when and where they work. For employers, the benefits can be just as strong: increased productivity, fewer sick days, and access to a global talent pool that’s less restricted by geography.

In the UK, hybrid work has become a key feature of the workplace. A 2023 report by the Chartered Institute of Personnel and Development (CIPD) revealed that about 65% of UK employers had embraced some form of hybrid working. But with this shift comes a need to rethink office space needs.

Impact on office space demand

Traditional office usage

There is an increase in demand for office space in the UK, particularly for premium high-quality, Grade A offices in central London. This trend is driven by companies seeking to provide employees with enhanced work environments.  There is a focus on energy-efficient buildings as businesses prioritize top-tier spaces to attract talent and meet sustainability standards.

RICS has noted that this heightened demand has led to a shortage of prime office spaces resulting in low vacancy rates in central London.  Demand for secondary and tertiary office spaces remains subdued – emphasising the focus on quality.

Emergence of flexible office spaces

Flexible workspaces such as coworking spaces are seeing a surge in demand. These spaces give businesses the flexibility to scale up or down based on how many people are in the office at any given time.

Redesigned office spaces

Companies are investing in repurposing existing spaces to make them more suitable for collaborative and flexible use, which could be seen as a form of demand growth in adapting to hybrid needs

The hub-and-spoke model

Another trend picking up steam is the hub-and-spoke model. This setup involves keeping a main office (the “hub”) but also opening smaller satellite offices near where employees live (the “spokes”). This model makes it easier for employees to avoid long commutes and allows businesses to spread their workforce across different areas. Cities like Bristol and Leeds are seeing more office space demand, as companies move away from the hustle and bustle of city centres to regional hubs.

Legal and regulatory considerations

Lease agreements

As businesses adjust their office setups, they need to be careful with lease terms. Downsizing or restructuring office space often requires revisiting clauses like early termination, alterations, subleasing permissions, and rent negotiations. Hybrid leases, which blend private and shared spaces, can also raise issues around liability and compliance that companies need to manage carefully.

Health and safety obligations

Even in a hybrid work environments, businesses still have to meet health and safety standards. This means ensuring that both office and home workspaces are safe for employees.

Conclusion

The hybrid work model represents a big shift in how businesses approach the workplace. For companies in the UK, figuring out how to meet the demands of flexible working while still using office space effectively is both a challenge and an opportunity. By adopting new strategies, investing in the right technology, and prioritising employee well-being, businesses can create environments that encourage growth, collaboration, and employee satisfaction.

The future of office space isn’t about how much square footage a company has—it’s about quality, flexibility, and sustainability. Whether it’s co-working spaces, regional offices, or reimagining traditional office layouts, the demand for office spaces will keep evolving. Businesses that manage to strike the right balance will be well-equipped to thrive in this increasingly flexible and dynamic work environment.

How we can help

Contact our real estate team for further advice.