CITY OF LONDON FIRMS RETREAT AS TECH FIRMS TAKE OVER
As the British economy slowly shows signs of recovery, tech is one sector experiencing rapid growth.
In July, we reported that Tech City has become home to 15,000 new businesses in the year preceding 31 March 2013.
And now new research has found that for the third year running, tech firms are the highest demanding sector for office space in the City.
For every 3 square foot being taken by financial firms, tech companies are taking 5 sq ft
Knight Frank predict tech firms will acquire 1.6 million square feet of office space in 2013.
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That’s a 23% increase in demand for commercial space from 2012.
In 2003, tech companies held a mere 454,000 sq ft in comparison. This means in 10 years the area has seen a 350% increase in space used by tech companies.
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Tech is spreading away from areas such as Shoreditch and Farringdon into the City and Holborn, the traditional home for finance and law firms.
In the first 6 months of this year, 869,000 sq ft of space was taken by tech firms compared with 513,000 sq ft by financial firms.
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For every 3 square foot being taken by financial firms, tech companies are taking 5 sq ft.
This was boosted by movements from large companies including Amazon to Holborn, Publicis to Chancery Lane and salesforce.com to the Heron Tower, where we filmed the first series of the Elevator Pitch.
It’s expected the second half of 2013 will be dominated by media companies rather than tech firms.
In July, News International agreed it would move from Wapping to London Bridge, bringing 3 national newspapers with it.
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Many have suggested this increase in demand brings a rise of rental prices in the area too.
Back in May, a report by GfK claimed that commercial property rents were rising due to the ‘hype’ around Tech City.
However research carried out by Tech City News found this wasn’t the case, moreover office space rent is rising at the same rate as other areas.
Speaking to a number of consultants about the rise, we found it was ‘not out of line above the rest of London’.
image credits: flickr/Katchooo/dullhunk/chriskealyphotography