Digital office demand

A recent report from Jones Lang LaSalle (JLL) argues that the upsurge of businesses from the digital and media sectors looking for office space in the EC1 area of London, means that this area can no longer be considered “fringe” in the context of London rents and office developments.

The Government’s “East London Tech City” initiative to promote Silicon Roundabout’s profile is increasing the global spotlight on the area. ‘Tech City’ encompasses the Shoreditch, Hoxton and Old Street areas of London. Technology firms have been one of the first sectors to take advantage of the improving UK economy and London is viewed as the best location for access to investors, drawing companies in

In terms of subsequent demand for office property this is a trend being tracked at Metropolis, with over 60 current local search requirements listed on the database, including office occupiers such as NeueHouse, Vodafone and Microsoft. In addition, there are a further 50 companies which have expansion plans or arDigitale approaching lease expiries in the area which will lead to property decisions.

Meanwhile, average office rents have risen from £17.20 per square foot to £33.60 in 2013 in the Shoreditch to Hoxton districts, according to Cushman Wakefield, which has led to a pricing out of some of the smaller start-ups in favour of the bigger companies. Start-ups such as GirlMeetsDress.com and Hassle.com say they moved away from the area due to surging rents. So the growth of the area has led to movement in both directions.

Mainstream developers are homing in on Silicon Roundabout, with schemes including Derwent London’s White Collar Factory and Helical Bar’s 207-211 Old Street scheme in the pipeline for 2015 – 2016. There is around 1 million sq ft of speculative space either under construction or with planning permission.

Looking ahead, some of the fastest growing digital companies in London include: Fixnetix, Leadpoint, Mimecast, Quickstart Global, Monitise, Forward Internet, Grove Group, Media Ingenuity, Translate Media and The Foundry. Metropolis is currently talking to many of these firms over their future property requirements.

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