Are tech companies taking over Central London? Recent research by Colliers International has revealed that tech firms increased their take up of space throughout offices in Central London by 91% between 2012 and 2013.
Tech sector expanding across Central London
The biggest news from the report wasn’t the rapid growth of the tech industry; it was the sector’s shift away from traditional tech locations, representing an expansion across Central London.
The soaring popularity of Tech City has significantly reduced the supply of office space in Shoreditch and until the completion of new, larger office developments such as Derwent London’s White Collar Factory and British Land’s Shoreditch Estate, companies with larger requirements will continue to find it challenging to find the size and quality of space they need.
Therefore, expansion into other areas providing offices in Central London is both logical and necessary, particularly for those with the largest work forces, like Google (moving to King’s Cross) and Facebook (Euston). Where the tech giants lead, the industry follows and we can expect to see further take up of office space in these areas by tech companies.
But Google and Facebook aren’t the only ones to seek an alternative to Tech City. As we wrote last year, a significant proportion of London’s leading tech startups are located away from Shoreditch, in locations as diverse as Clerkenwell, Marylebone and London Bridge. This pattern is also reflected among the city’s leading fin-tech firms.
This pattern shouldn’t seem so surprising when we consider the large scale and diversity of the twenty-first century tech sector, which touches upon everything from health to fashion, manufacturing to professional services.
Finance, legal and government downsizing offices in Central London
Moreover, tech firms seem to be the only sector intent on expanding their real estate portfolios.
Financial firms and legal firms are downsizing, looking to open-plan offices in Central London and higher density occupancy to reduce expensive leases.
Government departments are also looking to make cost – and space – savings, relocating staff and reshuffling departments across their real estate portfolio in a bid to sell off space. Last week the Department for Education revealed plans to move into the 19th Old Admiralty Building in Whitehall, offices currently occupied by the Foreign Office. In turn, the Foreign Office will relocate to offices on King Charles Street, also in Whitehall. The government believes the resulting savings will amount to £8.5m a year.
Whilst more traditional occupiers look to reduce or vacate their offices in Central London, the tech firms are busy moving in. You’ll find them at the heart of the City, in King’s Cross, in Holborn and even in Mayfair. In short, they’re interwoven across Central London’s landscape in the same way that technology is woven throughout our daily lives.
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