Tech Firms Replace Finance And Law In The City Of London
Redistribution of office space reflects the wider trends in the UK economy
This year, office space occupied by the Technology, Media and Telecoms (TMT) companies in the City of London is set to grow by 1.6 million sq ft, or 23 percent. In comparison, finance and law firms, the traditional inhabitants of the ‘Square Mile’, will extend their offices by just one million sq ft.
Research by property consultancy Knight Frank suggests that one of the world’s leading centres of global finance is slowly transforming through the efforts of new arrivals like Amazon and Salesforce.com.
“This is occurring because the tech and media firms have outgrown converted warehouse offices and are now seeking modern, high specification office buildings,” explained James Roberts, head of commercial research at Knight Frank.
It’s not just Shoreditch
Ten years ago, the total office space taken up by the TMT companies in the City stood at just 454,000 sq ft. But the times are changing, and harbingers of the Internet economy are gradually moving from the fringes of Shoreditch, Farringdon and Soho into the heart of London.
According to Knight Frank, 2013 is the third consecutive year that TMT firms have been the largest source of office demand in the City.
Among the companies getting their hands on some prime real estate are Amazon with its new London headquarters at Sixty London, business advisory firm FTI Consulting at 200 Aldersgate Street, and Salesforce.com at the Heron Tower.
Meanwhile, the largest office deal for the financial sector involved Worldpay, an online payments company which could as easily represent the tech industry. It acquired 92,000 sq ft at The Walbrook, near the Bank of England.
“Whereas a few years ago, TMT growth in the City was largely a fringe phenomenon, it is now broader-based. Sixty London, 200 Aldersgate, and Heron Tower are buildings where I would more expect to see legal and financial firms taking space, than tech and media firms. Amazon at Sixty London will count other techs as neighbours, like Skype and Lastminute.com, but also veteran City lawyers, like Hogan Lovells and Dentons.”
“I see the roll-out of 4G mobile as generating further demand for London office space from the TMT sector in the next two years. We are forecasting TMT firms to take a further 1.8m sq ft of offices in the City in 2014.”
Meanwhile, Google has already begun construction of its £1 billion headquarters at King’s Cross.
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