City Heatmap: How London's Hybrid Workforce Uses Third Spaces

London has played host to endless reinventions of work and the workplace.

Let's travel back to the 14th century, when it birthed the first professional lawyers from the newly founded Inns of Court. Then, in the 17th century, new protections for shipping firms evolved into what some call the world's first insurance firm, and the modern water industry was born.

In the 18th century, Fleet Street was lined with printing presses and became synonymous with a new line of work called journalism, whilst Soho became the epicenter of film production long before Hollywood monopolized it. In the 19th century, rowdy coffeehouse trading became the London Stock Exchange, and in the 21st century, Old Street's "Silicon Roundabout" played host to the UK tech scene bursting into action.

Every London district has its own chapter to tell in the history of modern business: streets where entire markets were birthed, districts in which new job titles appeared overnight and landmarks that have seen the boom and bust of business over hundreds of years.

But in the last five years the city has seen its most dramatic shift since the Industrial Revolution.

By the early 2010s, London's corporate skyline was still a symbol of status. But when the pandemic hit, almost overnight, the "Square Mile" fell eerily silent. The number of Londoners able to work from home (and encouraged to do so) doubled between 2019/20 and 2023/24, from 0.78 million to 1.57 million - around 35% of the capital's workers. Today, 61% of Londoners work in a hybrid model, compared to just 37% before the pandemic.

Welcome to the hybrid era — where a workspace is more a platform than a place, more culture than cubicle. But the London office didn't die, it just diversified. The West End now hosts high-value brand HQs for entertaining clients, Kings Cross has become a knowledge corridor for tech and science firms, and Shoreditch a startup epicenter.

Just like the rise of a legal system, a financial institution or the broadsheet in the centuries before it, this transformation is causing London business leaders to think existentially. London CEOs, HR leaders, real estate heads and People managers must now ask themselves: what is the office actually for?

It's not to keep an eye on staff, to return to business-as-usual, or as a home for day-to-day granular tasks. No, today's office is the stage for the culture of the organization to come to life. It's a vehicle for key business outcomes like collaboration, onboarding, networking and mutual inspiration. London has weathered plagues, fires, booms and busts - and always builds back differently. The flexible work transformation is no different.

Why London is going hybrid

So the days of going to a London office five days a week are behind us. But to truly take advantage of this transformation, we need to understand the drivers of change. What factors are influencing London's hybrid work shifts in 2025?

• New demands from employment law. UK legislative changes have moved the legal baseline for flexibility in the workplace - with real knock on effects for office managers. In April 2024, the government made it a statutory right to be able to request flexible work from day one of a worker's career. This put new requirements on office managers and People leaders to build in processes for handling bespoke requests, to update how they communicate their flexible offering and define the criteria for approvals/refusals against new legislation.

• Sustainability/ESG drivers. London-based firms, especially those on the London Stock Exchange, face pressure to comply with net zero targets - and in particular their goals to reduce their 'Scope 3' carbon emissions, which include their office spaces, suppliers and purchased goods. In fact, 82% of LSE companies have some kind of net zero target they have to meet. What's more, the UK government and the Financial Conduct Authority (FCA) have made climate-related disclosures mandatory for the largest companies - causing many firms to revisit their real-estate portfolios full of high-emitting offices, labs and research centers.

• Declining value of London office real estate. London office property values fell by 20% between mid-2022 and mid-2024 as the pandemic shifted the whole concept of the office. A key challenge real-estate teams are facing is the financial risks posed by stranded assets: old-fashioned, non-compliant and not-fit-for-purpose office spaces draining profits as they lie empty. Nearly 83% of commercial buildings in UK city centers hold an Energy Performance Certificate (EPC) rating of C or below, meaning they're likely to fail against incoming energy efficiency standards without serious investment to retrofit or update old stock.

• Quality over quantity of office spaces. The average cost of a private office desk in London rose by 12% last year, reaching £805 per desk per month. These rising costs aren't causing London companies to ditch their offices altogether, they just drive the need for premium, amenity-rich environments so organizations get the best experience for their pounds. 82% of UK firms still have a physical office, so discussion of a universal remote shift is overrated. Instead, companies are consolidating their offices into larger, better quality buildings.

• The London talent war. The post-Brexit landscape, lower migration from Europe has shrunk some key skill pools, making the cost of labor higher in London. Attracting and keeping specialized talent is harder than ever. Much like New York, in London, employee resistance to any firm RTO mandate is high. Less than half of London workers say they would comply with a five-day-a-week policy, and those employees that do adopt rigid in-person work policies are seeing higher rates of churn, especially amongst younger staff.

• Sector specific space at a premium. To put it simply, not all work can be remote. Life-sciences, labs, manufacturing, film and creative studios need a specialized physical space which continues to inform the hybrid models these firms use. Centers of innovation like Kings Cross and White City are seeing growing demand for research and lab workspace, whilst studio-as-a-service offerings are growing fast to cater to the city's entertainment, film, fashion and advertising sectors.

• Soaring co-working options. Greater London now hosts over 1,200 coworking sites - as the market for alternative work options, or "third spaces" booms. Occupancy in UK coworking spaces is strong at around 80-90%, showing demand is high. This means office managers have more options than ever before when it comes to hub-and-spoke models and suburban satellite options.

Where People Actually Work: The Transformation of the London Office

Trend 1: The East London HQ consolidation

Midsize tech firms in the UK capital are choosing to expand their flagship offices and close smaller satellite offices to drive in person product sprints, mentorship and better crossover of development and product teams.

By consolidating into one bigger central HQ, they can build in more collaborative zones as a driver for culture and innovation. Research shows these new HQs tend to dedicate around 60% of floor space to collaborative zones like product labs, agile walls, interview suites and social spaces.

Many firms in this sector are choosing the Shoreditch area for their flagship permanent space given its proximity to high density tech talent. The most common model in this instance is a 2-day-a-week in-office requirement at the HQ, with networking and social events scheduled for after these days.

For example, one FinTech company found that by consolidating its development and product teams into a single, vibrant Shoreditch HQ, they saw a direct correlation to innovation metrics, with a projected 20% increase in cross-functional product sprints and a measurable uplift in new feature velocity.

Meanwhile, former satellite offices are being replaced by company-negotiated hot-desking through coworking marketplaces like Croissant, meaning employees can always access a local third space when they don't want to work from home or central office.

Trend 2: The splinter effect to distributed hubs

Some London finance firms are ditching their large traditional office spaces in Canary Wharf following years of low occupancy post-pandemic and soaring rent and maintenance costs. Instead, they're opting for smaller, localized hubs with more flexible rents and shorter contracts - in the City, West End, Southbank or East London.

This means better commute options for staff that live in suburbs and outer boroughs, improved proximity to clients in the West End or City, and cost savings by reducing the vacancy risk increasingly associated with poor quality stock in Canary Wharf. In many cases, this is combined with new UK-wide hubs outside of London, for instance in Manchester or Bristol to attract regional talent.

For one accountancy corporation, transitioning from a single, high-cost Canary Wharf HQ to a network of four localized hubs reduced the average employee commute by over 5 hours a month. This move was directly cited by 30% of its new hires in the last six months as a deciding factor, proving the 'hub-and-spoke' model to be a significant talent differentiator.

Trend 3: The client showroom

A number of London-based media brands are reducing the size of their central offices to re-frame the office as purely a client entertainment center, a meeting point for senior leadership and a focal point for brand presence. These tend to be in the Mayfair/Fitzrovia/Pimlico area for proximity to the West End and major media centers.

Meanwhile, their actual day-to-day work happens at co-working spaces, using a serviced office provider to manage company-wide credits, usage and occupancy. Most workers opt for spaces in the Kings Cross, Vauxhall or Hackney areas, going into the brand HQ only to meet with clients or during all-office days when connecting with senior leadership.

This comes with a tangible upside. A company-wide co-working pass for a 100-person team typically costs 25-40% less annually than a fully leased, equivalent-sized traditional office, due to the ability to pay for peak-day usage rather than full capacity.

One entertainment company says right-sizing its Mayfair office to a premium client-facing brand showcase has boosted ROI by shifting 100% of their real estate spend to a small but high-impact space. This focus has elevated its new business pitch close rate by 10% due to the enhanced client experience and brand recognition.

Trend 4: The neighborhood microhub

Some office managers are experimenting with micro-hubs in outer London boroughs like Walthamstow, Wimbledon, Croydon or Ealing to shorten commutes, and support employees to gather in a physical space 2-3 days a week.

Just like New Yorkers, Londoners increasingly expect to find all the amenities, services, green spaces and shops they need within their local community. The "15 minute city" model means they are less willing to commute than they were pre-pandemic.

The neighborhood microhub allows employees to walk or cycle to work, reducing commuting costs for them, cutting their collective carbon footprint and bringing added health and wellbeing outcomes from physical exercise. In the age of flexible working hours, this actually increases productivity given the microhub is closer to school dropoffs, doctors' appointments and workers' homes.

One London consultancy found that its network of outer-borough microhubs has resulted in a 15% reduction in employee stress scores related to commuting and has directly improved team-level collaboration for staff that live locally. The consultancy even reported a 2-day increase in average annual in-person collaboration compared to fully remote teams, whilst reducing the company's scope 3 emissions by around 40% - aligning its real estate strategy with core sustainability targets.

Trend 5: The Anchor Space with added flex

Other People leaders are pursuing a blend of fixed and flexible office space as they embrace the hybrid work transformation in London. This means keeping a lease on a core HQ where employees are required to work 2 or 3 days a week, but embedding a flexible "third space" operator into the same building to allow for overflow and ensure project teams can comfortably scale up and down as needed.

Common in the Kings Cross, Paddington and Liverpool street areas, the combination of an HQ with flex space one floor down protects against financial drain from low occupancy rates, and is particularly well suited to fast-growing agile teams in the law and tech sectors.

It can bring compliance benefits too in regulated sectors: law firms can use the dedicated anchor space for sensitive client data or meetings, with the flex space open for temporary administrative support or drop-ins from their public affairs agency.

One law firm reports that embedding a flexible third-space operator directly into its Liverpool Street anchor HQ allowed it to onboard project teams and new hires with zero lead time. This has led to dramatic results, meaning it can mobilize high-priority client projects 3 weeks faster than traditional leasing models would usually allow.

Trend 6: Fully remote with an event based presence

Some London organizations opt for a remote-first approach. This means ignoring the trend for a 'two days in the office' working model. Instead, they mandate one full week per quarter of in-person collaboration, for which they might hire a high-value, collaborative space for a company-wide 'summit' using an office-as-a-service provider. This is likely to be in the Waterloo or Paddington area which is accessible for all and has strong transport links.

This brings serious cuts to overhead cost. The price of hiring a high-value summit space 4 times a year for a 50-person team is often only 10-15% of the cost of an equivalent annual lease - a dramatic drop in overheads with much higher ROI.

This approach also fosters more meaningful and structured face-to-face time for employees, making the office more of a culture generator and personal development accelerator rather than just a destination for day-to-day work.

One digital marketing agency argues that moving to a fully remote model with an event-based office presence unlocked the freedom to hire the best talent across the entire UK without geographical constraints. They achieved this whilst cutting their operational overheads by a staggering 85% on fixed real estate costs, re-allocating those funds directly into employee training and benefits. They say their latest summit resulted in 90% of employees rating the session as highly valuable for forward planning and professional development.

Londoners Work from Everywhere: Taking Advantage of the Workplace Revolution

What's clear is that in 2025, Londoners are working from everywhere. It's not the location or the destination that's important. Whether a central HQ, a satellite hub, a hyperlocal office, a home office, a co-working network or flex space - there's no one-size-fits-all. London business is once again reinventing itself and building hybrid work policies from scratch that are tailored to their workforce rather than repeating the patterns of old.

At Croissant, we've seen this transformation up close and bring you a guide to making the most of this workplace transformation, rather than being overwhelmed by it.

1. Audit your office portfolio and consider a fixed/flexible approach. This must be based on a data-driven assessment of how your spaces are performing, and a detachment from the traditional office model we associate with the City of London in the 1990s.

2. Define the office's actual purpose. Do you have an answer to the question: 'what is our office actually for?' If not, it's time to go back to the drawing board. Without this, employees are likely to see any kind of in-person mandate as grounded in a lack of trust and a desire to micro-manage or supervise when it isn't needed.

3. Design a Collaboration-As-A-Service model within your hybrid work policy. Employees don't just want a place to work, they need to be uplifted with a way to work too. So when approaching hybrid work, consider how flexible work spaces underpin culture and enable co-working in a truly collaborative sense. For instance, one London advertising firm built a bubble-map of where its employees live and work and found a concentration of designers in the Croydon area. This allowed them to set up a satellite office where that group could meet once a month, reducing loneliness, unlocking creative collaboration and a sense of belonging.

4. Engage an expert workspace partner. Partnering with a workspace specialist helps make sure your hybrid strategy isn't just a bit of paperwork no one reads. A partner like Croissant can identify the ideal mix of permanent, short-term, and on-demand spaces, and provide detailed analytics on how your teams actually use them. This can then be revisited monthly and refined as you grow over time. Collaborating with a platform like Croissant also eases the load on HR departments overwhelmed by multiple suppliers, scattered usage data, and the challenge of keeping remote-work costs under control.

Get in touch today to explore how you can take advantage of the latest economic revolution taking London by storm: hybrid work.