Tech companies are favouring Londons city core over the city fringe, including areas like the so-called silicon roundabout, according to the latest research from real estate advisor Savills.
With almost three times as much office space committed to by technology firms in central London compared to the city fringe (which includes areas like Old Street and South Bank) in the first quarter of the year, downtown London is proving a popular spot for the citys booming tech sector.
In the first three months of 2018, take-up by tech occupiers in the city core has reached 114,843 square feet (sq ft) already over half the total tech take-up seen in this area in all of 2017. By comparison, tech take-up in the city fringe in the first quarter of 2018 is at just 42,473 sq ft.
“Where we have historically seen the majority of tech occupiers opt for fringe locations, there has been a notable shift in 2018 driven by a lack of supply in these areas,” said Paul Bennett, director of Savills central London office. “Tech firms with large operations require buildings that will support their staff and business, and we are seeing landlords in the city core re-position their buildings to cater for these tenants.”
Key examples of tech companies setting up shop in the city core include co-working group WeWork snapping up a 13-building estate for £580m, cloud-based email management company Mimecast signing a lease on to 78,629 sq ft space at 1 Finsbury Avenue and data protection firm CallSign agreeing to a new lease on a 13,443 sq ft property at 150 Cheapside.
Overall the analysis from Savills shows that tech take-up in the city (both core and fringe sub-markets) last year was up 65 per cent on the 10-year average – the highest level of take-up seen in the city by tech companies since 2000.