Higher-quality flexible workspace in London is consistently outperforming traditional office rents, with top-tier products reaching returns of more than 200% of headline rents in some submarkets, according to a new index.

The Flexible Workspace Return Index, produced by flex office consultancy Hewn, analysed 2025 and five-year performance trends across product grades of 5-star, 3-star and 1-star, comparing achieved desk rates against conventional office rents in London's key submarkets.

It identified a widening gap between quality tiers. Premium and midgrade flexible workspace has consistently outperformed traditional rents, while lower-grade product has shown significantly greater volatility and, in several locations, has struggled to keep pace with conventional office returns.

In Canary Wharf, 5-star product delivered record desk rates in Q2 and Q3, with levels exceeding 230% of market rents. The City saw its highest five-year levels in the same period, briefly reaching close to 200% of prime rents before softening to around 130% in Q4. Midtown and Southbank also posted strong first-half performance, with 5-star levels of 150%-160% and 180%, respectively, though both eased in the second half of the year, Hewn said.

The West End remained the strongest performing submarket overall, sustaining the highest desk rates and returns across the year. Stratford in east London continued to lag the rest of the capital, with levels of 35%-45% of market rents.

“Last year was a tale of two halves in terms of performance," Hewn founder Will Kinnear said in a statement.

"This is the second year we’ve produced this report, and what it demonstrates on a year-by-year basis and across a five years’ timeline, that when done right flexible workspace products can consistently outperform the traditional office market — this year levels reaching over 200% of headline rent, even during periods of economic turbulence affecting the wider commercial real estate sector.”

The index combines quarterly traditional office market data with flexible workspace desk-rate data, technology costs and proprietary operational cost data.

Late last year, CBRE forecast that London's flexible office market could make up a fifth of total office stock by 2030, nearly doubling its current 12% share. It predicted that the capital's flex market would reach 50M SF within five years, driven by sustained occupier demand now being met by a growing number of landlords entering the sector.

However, the sector's growth has not been without turbulence, notably the collapse of WeWork, which continues to operate but has significantly downsized since its meteoric rise.