diff --git a/src/components/views/spaces/SpacePanel.tsx b/src/components/views/spaces/SpacePanel.tsx
index 27f097e9d4..2e3bfd157a 100644
--- a/src/components/views/spaces/SpacePanel.tsx
+++ b/src/components/views/spaces/SpacePanel.tsx
@@ -14,18 +14,18 @@ See the License for the specific language governing permissions and
 limitations under the License.
 */
 
-import React, { useEffect, useState } from "react";
+import React, { Dispatch, ReactNode, SetStateAction, useEffect, useState } from "react";
 import { DragDropContext, Droppable, Draggable } from "react-beautiful-dnd";
 import classNames from "classnames";
 import { Room } from "matrix-js-sdk/src/models/room";
 
-import {_t} from "../../../languageHandler";
+import { _t } from "../../../languageHandler";
 import RoomAvatar from "../avatars/RoomAvatar";
-import {useContextMenu} from "../../structures/ContextMenu";
+import { useContextMenu } from "../../structures/ContextMenu";
 import SpaceCreateMenu from "./SpaceCreateMenu";
-import {SpaceItem} from "./SpaceTreeLevel";
+import { SpaceItem } from "./SpaceTreeLevel";
 import AccessibleTooltipButton from "../elements/AccessibleTooltipButton";
-import {useEventEmitter} from "../../../hooks/useEventEmitter";
+import { useEventEmitter } from "../../../hooks/useEventEmitter";
 import SpaceStore, {
     UPDATE_INVITED_SPACES,
     UPDATE_SELECTED_SPACE,
@@ -38,9 +38,9 @@ import {
     RovingAccessibleTooltipButton,
     RovingTabIndexProvider,
 } from "../../../accessibility/RovingTabIndex";
-import {Key} from "../../../Keyboard";
-import {RoomNotificationStateStore} from "../../../stores/notifications/RoomNotificationStateStore";
-import {NotificationState} from "../../../stores/notifications/NotificationState";
+import { Key } from "../../../Keyboard";
+import { RoomNotificationStateStore } from "../../../stores/notifications/RoomNotificationStateStore";
+import { NotificationState } from "../../../stores/notifications/NotificationState";
 
 interface IButtonProps {
     space?: Room;
@@ -121,11 +121,62 @@ const useSpaces = (): [Room[], Room[], Room | null] => {
     return [invites, spaces, activeSpace];
 };
 
+interface IInnerSpacePanelProps {
+    children?: ReactNode;
+    isPanelCollapsed: boolean;
+    setPanelCollapsed: Dispatch<SetStateAction<boolean>>;
+}
+
+// Optimisation based on https://github.com/atlassian/react-beautiful-dnd/blob/master/docs/api/droppable.md#recommended-droppable--performance-optimisation
+const InnerSpacePanel = React.memo<IInnerSpacePanelProps>(({ children, isPanelCollapsed, setPanelCollapsed }) => {
+    const [invites, spaces, activeSpace] = useSpaces();
+    const activeSpaces = activeSpace ? [activeSpace] : [];
+
+    return <div className="mx_SpaceTreeLevel">
+        <SpaceButton
+            className="mx_SpaceButton_home"
+            onClick={() => SpaceStore.instance.setActiveSpace(null)}
+            selected={!activeSpace}
+            tooltip={_t("All rooms")}
+            notificationState={RoomNotificationStateStore.instance.globalState}
+            isNarrow={isPanelCollapsed}
+        />
+        { invites.map(s => (
+            <SpaceItem
+                key={s.roomId}
+                space={s}
+                activeSpaces={activeSpaces}
+                isPanelCollapsed={isPanelCollapsed}
+                onExpand={() => setPanelCollapsed(false)}
+            />
+        )) }
+        { spaces.map((s, i) => (
+            <Draggable key={s.roomId} draggableId={s.roomId} index={i}>
+                {(provided, snapshot) => (
+                    <SpaceItem
+                        {...provided.draggableProps}
+                        {...provided.dragHandleProps}
+                        key={s.roomId}
+                        innerRef={provided.innerRef}
+                        className={snapshot.isDragging
+                            ? "mx_SpaceItem_dragging"
+                            : undefined}
+                        space={s}
+                        activeSpaces={activeSpaces}
+                        isPanelCollapsed={isPanelCollapsed}
+                        onExpand={() => setPanelCollapsed(false)}
+                    />
+                )}
+            </Draggable>
+        )) }
+        { children }
+    </div>;
+});
+
 const SpacePanel = () => {
     // We don't need the handle as we position the menu in a constant location
     // eslint-disable-next-line @typescript-eslint/no-unused-vars
     const [menuDisplayed, handle, openMenu, closeMenu] = useContextMenu<void>();
-    const [invites, spaces, activeSpace] = useSpaces();
     const [isPanelCollapsed, setPanelCollapsed] = useState(true);
 
     useEffect(() => {
@@ -134,10 +185,6 @@ const SpacePanel = () => {
         }
     }, [isPanelCollapsed]); // eslint-disable-line react-hooks/exhaustive-deps
 
-    const newClasses = classNames("mx_SpaceButton_new", {
-        mx_SpaceButton_newCancel: menuDisplayed,
-    });
-
     let contextMenu = null;
     if (menuDisplayed) {
         contextMenu = <SpaceCreateMenu onFinished={closeMenu} />;
@@ -204,7 +251,11 @@ const SpacePanel = () => {
         }
     };
 
-    const activeSpaces = activeSpace ? [activeSpace] : [];
+    const onNewClick = menuDisplayed ? closeMenu : () => {
+        if (!isPanelCollapsed) setPanelCollapsed(true);
+        openMenu();
+    };
+
     return (
         <DragDropContext onDragEnd={result => {
             if (!result.destination) return; // dropped outside the list
@@ -226,59 +277,26 @@ const SpacePanel = () => {
                                         pointerEvents: "none",
                                     } : undefined}
                                 >
-                                    <div className="mx_SpaceTreeLevel">
-                                        <SpaceButton
-                                            className="mx_SpaceButton_home"
-                                            onClick={() => SpaceStore.instance.setActiveSpace(null)}
-                                            selected={!activeSpace}
-                                            tooltip={_t("All rooms")}
-                                            notificationState={RoomNotificationStateStore.instance.globalState}
-                                            isNarrow={isPanelCollapsed}
-                                        />
-                                        { invites.map(s => (
-                                            <SpaceItem
-                                                key={s.roomId}
-                                                space={s}
-                                                activeSpaces={activeSpaces}
-                                                isPanelCollapsed={isPanelCollapsed}
-                                                onExpand={() => setPanelCollapsed(false)}
-                                            />
-                                        )) }
-                                        { spaces.map((s, i) => (
-                                            <Draggable key={s.roomId} draggableId={s.roomId} index={i}>
-                                                {(provided, snapshot) => (
-                                                    <SpaceItem
-                                                        {...provided.draggableProps}
-                                                        {...provided.dragHandleProps}
-                                                        key={s.roomId}
-                                                        innerRef={provided.innerRef}
-                                                        className={snapshot.isDragging
-                                                            ? "mx_SpaceItem_dragging"
-                                                            : undefined}
-                                                        space={s}
-                                                        activeSpaces={activeSpaces}
-                                                        isPanelCollapsed={isPanelCollapsed}
-                                                        onExpand={() => setPanelCollapsed(false)}
-                                                    />
-                                                )}
-                                            </Draggable>
-                                        )) }
+                                    <InnerSpacePanel
+                                        isPanelCollapsed={isPanelCollapsed}
+                                        setPanelCollapsed={setPanelCollapsed}
+                                    >
                                         { provided.placeholder }
-                                    </div>
+                                    </InnerSpacePanel>
+
                                     <SpaceButton
-                                        className={newClasses}
+                                        className={classNames("mx_SpaceButton_new", {
+                                            mx_SpaceButton_newCancel: menuDisplayed,
+                                        })}
                                         tooltip={menuDisplayed ? _t("Cancel") : _t("Create a space")}
-                                        onClick={menuDisplayed ? closeMenu : () => {
-                                            if (!isPanelCollapsed) setPanelCollapsed(true);
-                                            openMenu();
-                                        }}
+                                        onClick={onNewClick}
                                         isNarrow={isPanelCollapsed}
                                     />
                                 </AutoHideScrollbar>
                             )}
                         </Droppable>
                         <AccessibleTooltipButton
-                            className={classNames("mx_SpacePanel_toggleCollapse", {expanded: !isPanelCollapsed})}
+                            className={classNames("mx_SpacePanel_toggleCollapse", { expanded: !isPanelCollapsed })}
                             onClick={() => setPanelCollapsed(!isPanelCollapsed)}
                             title={isPanelCollapsed ? _t("Expand space panel") : _t("Collapse space panel")}
                         />