UK Flex Operator Workspace Group Targets London’s 10–100 Employee SMEs Amid Soft Financial Results

The UK based coworking operator Workspace Group is doubling down on a strategic bet that London’s expanding population of small and medium-sized enterprises (SMEs) will be key to long-term growth—even as short-term financial results reflect ongoing headwinds in the flexible office market.

This week, the company reported its full-year 2024–2025 results. While customer demand remained resilient—with 1,266 lettings and 500 renewals—like-for-like occupancy dropped from 88% to 83%, contributing to a slight dip in rent roll. Still, Workspace posted a pre-tax profit of €6.4 million, a notable improvement over the previous year’s significant loss. The recovery was largely driven by a smaller decline in property valuations. Importantly, underlying rent per square foot grew by 4.8%, and demand remained especially strong for smaller units, with Estimated Rental Value (ERV) per square foot for this segment rising faster than average, says a financial statement.

That momentum underpins Workspace’s sharpened strategy, focused on the vibrant SME segment—particularly those with 10 to 100 employees in creative and innovative fields.

According to an independent research, over the past decade, London-based SMEs with 10 to 100 employees have grown at a significantly faster pace than the UK average, making them one of the most dynamic segments of the capital’s economy. These businesses—particularly those employing between 10 and 99 people—have seen steady and sustained expansion, in contrast to sole traders and micro-businesses, which are in decline.

This growth trend is especially pronounced in London, where the concentration of high-growth SMEs outpaces national figures, reinforcing the capital’s role as a hub for entrepreneurial and innovation-driven companies.

 Workspace Group says 55% of its SME customers can be positioned in the “Creators & Innovators” segment of the respective industries those companies operate in, whereas “Creators & Innovators” on average only represent 25% of the companies in the respective studied industries.

To capture this market, Workspace announced it is executing its “Fix Accelerate Scale” framework, aimed at embedding operational excellence across all fronts. This includes subdividing large units into smaller, higher-demand spaces, enhancing customer retention, and rolling out a full-funnel marketing strategy—including the company’s first TV campaign. The approach is designed to make Workspace more agile, data-driven, and customer-centric, while simultaneously streamlining costs and increasing flexibility in its product offering.

Unlike some asset light coworking operators, Workspace owns and operates all its properties, managing a portfolio valued at over €2.7 billion. For the company, this ownership model not only allows greater control over operations and refurbishment projects but also supports strategic capital recycling—disposing of underperforming assets to reinvest in high-conviction, high-return properties.

While macroeconomic uncertainty and continued pressure on large-unit occupancy may weigh on short-term performance, Workspace believes its SME-focused strategy positions it to stabilise and grow rent roll over time. A return to 90% occupancy across its like-for-like portfolio, for example, would unlock an additional €20.39 million in rent roll at current ERV levels. In a competitive and fragmented market, the company’s alignment with London’s most dynamic business segment may be its strongest asset moving forward.