By, Alan Pepper, CEO Orega

Whilst we have all started to grapple with the increasing economic and political volatility that has emerged over the last quarter, the flex workspace sector has continued to show resilience and growth. Operators have continued to open new sites, particularly in London and we have seen a renewed interest in property owners specifying flex options for new developments as well as refurbishments.

Strong Performance Amid Uncertainty

At Orega, we have made significant progress in the last quarter, particularly with sites we opened last year. Our flagship location at 51 Lime Street, a premium amenity-rich site in the heart of the City, is now completely full, well  ahead of plan. This success is in part due to the move-in of a substantial financial services client who took advantage of a bespoke, curated office space designed to meet its specific needs.

Our expansion at 70 Gracechurch Street has continued smoothly. Its prime location, minutes from Monument Station, is attracting a steady stream of clients. Our new site at 80 Strand is also progressing strongly, with a growing list of well-known clients that we are proud to serve. Beyond London, our regional sites in Leeds (Broad Gate) and Birmingham (Ingenuity House) are developing well, with a strong mix of occupiers, including well-known large corporations.

Hybrid working patterns continue to evolve. While working patterns vary across the country, attendance is steadily increasing throughout the week, with Mondays becoming more popular for in-office work. Unsurprisingly, Fridays remain the most common work-from-home day. As part of that evolution, clients are looking at how they can utilize their office space more efficiently, and we are adapting our product offerings to meet these changing demands.

Despite the mix of economic uncertainty, inflationary pressures and slow growth, exacerbated even more recently by the US tariffs, we are still seeing good levels of occupier demand and transactional activity.  We see a continuing higher volume of larger and more established businesses coming out of leased space or trading up to higher amenity flex space, driving up our average client “size” to nearly 20.  To some extent we may benefit from the current levels of uncertainty as businesses have to make an occupancy decision at some point.

So, the first quarter of 2025 has concluded with a mixed scorecard, but some positive signs. How do I see that developing over the rest of the year? 

Larger Flex Spaces and Regional Growth

The last few years have seen a surge in CAT A+ /fully fitted landlord space enter the flex market, particularly across London.  This market shift has been driven by demand from larger occupiers for quality flexible space in central locations, but without the capital outlay and hassle of setting it up themselves, particularly under 5,000 sq. ft and even increasingly in the 5,000 and 10,000 sq. ft space range.

This demand has extended beyond London, particularly to the major regional cities like Manchester, Leeds, and Birmingham. We believe this will continue to spread across the other large cities as amenity rich “space and service” becomes more established in the UK. 

We are also increasingly working with our landlord partners to expand our services into other elements of their buildings- using our core flex space centre as a base for broader managed products. One example is our collaboration with a landlord partner to co-market and service suites of 2,500 sq.ft. or more within our building. 

Additionally, we are engaging in tri-partite transactions across Manchester, Leeds, and Birmingham, where we are expanding our existing clients from flexible to conventional space within the same building. This retains the client in occupation for the landlord, whilst providing location and continuity of service to the occupier themselves. 

This element of our business is only going to continue.

The Importance of Top-Quality Amenities and Service

In today’s market, occupiers are looking for more than just a functional office space. They demand high-quality amenities and excellent service, with a focus on hospitality that creates a seamless experience for employees. This trend is evident across the UK, from London to regional cities, where businesses are willing to pay more for well-located, amenity-rich environments.

At Orega, we have always placed a strong emphasis on the quality of our service and the amenities we provide, in the belief that if clients are well looked after, they are encouraged to stay rather than face the trauma of moving elsewhere. Businesses are also prepared to pay more for a well-located amenity rich environment- which is why 51 Lime Street, featuring a canteen, Starbucks café, gym, and auditorium, has been so successful. 

Providing access to the best technology is equally important. Our recent office survey revealed that businesses value dedicated internet provision for security reasons, particularly large corporates considering flexible space solutions. Top-tier technology services for our clients is therefore core to our offer.

Rising Competition from New Operators

As demand for flexible workspaces grows, so does competition with a range of newer, often regional, players.. We are seeing global expansion from the likes of Industrious, now wholly owned by CBRE, as well as national expansion from newer players. In response, we at Orega have also been expanding, with over ten new sites launched across the UK in the last two years, including a focused push into London.

Given the increase in the proportion of landlord portfolios now being allocated to flex, and a particular focus on managed space, we expect the blurring of the lines between serviced offices and managed offices will continue.  Equally, more and more landlords are approaching us to discuss joint venture structures to allow for the provision of flex within their buildings.

That said, with increasing prime rents in regional cities together with a good number of recent new signings by operators, some of this regional expansion may become more challenging given more difficult economics. Operators will need to remain focused and strategic in their approach to expansion in these markets.

Aligning with Corporate and Social Values

As businesses increasingly look to align their office spaces with their corporate and social values, the importance of sustainability cannot be overstated. According to our recent office survey, employees place a premium on working in spaces that provide natural light, fresh air, and controllable temperatures. Moreover, nearly half of workers stated that if their office space was of poor quality, they would consider seeking new employment, even if they had a good boss and a competitive salary.

Business owners are taking these concerns seriously. We are seeing a growing demand for evidence of sustainability in both our operations and those of our landlord partners. Beyond environmental sustainability, companies are also seeking flexible spaces that promote employee engagement and well-being. These considerations are becoming key drivers in the decision-making process for office space.

Looking Ahead: Focusing on Flexibility and Service

As we move into the rest of 2025, the economic and geopolitical uncertainty looks likely to persist.  However, businesses will continue to prioritize flexibility and productivity, even as they remain cautious about costs.

In the near term, we expect to see continued growth in office attendance, with employees keen to “be seen” and businesses focussed on delivering greater output and identifying and managing spare capacity. We are already seeing previous “homeworking” teams take office space as a base to ensure regular employee engagement and collaboration. 

This increased demand for office space will drive further innovation in flexible workspace solutions.

At Orega, our focus will remain on delivering exceptional service at the right value and providing flexible workspace solutions that enable businesses to concentrate on running their businesses effectively and thrive. We will continue to expand strategically in key locations, primarily London and major six regional cities, while working with our existing partners to enhance their managed offerings. 

We also plan to further develop our technology offer – be that to deal with an ever increasingly number of Wi-Fi devices, increased security arrangements or greater demand for video technology. Equally we will be delivering bespoke working environments, including collaboration zones, focus rooms, and phone booths, to meet the evolving needs of our clients.

In conclusion, the flex workspace market is evolving at an accelerated pace. The demand for flexibility, top-tier amenities, and superior customer service will only increase as businesses continue to adapt to changing working patterns. The role of technology, sustainability, and corporate values will be key themes for the rest of the year and into 2026 and will play an increasingly important role in shaping the future of the industry.