Trends in the London Tech Market

Colliers International has just published its ‘Tech Market Monitor’ for summer 2016. The report looks at the impact of the Tech and Media sectors in London over the last five years and the current trends in the London market.

The main conclusions include:

  • London companies are becoming increasingly ‘footloose’ and are increasingly not tied to traditional London office districts;
  • Tech and Media are now the ‘key drivers’ of the London office market and the sector has seen 5.2m sq ft of moves in the last five years;
  • Tech and Media occupiers, such as Facebook (227,000 sq ft), Google (180,000 sq ft) and Universal Music (173,000 sq ft) were responsible for 26% of London office space taken in 2015;
  • The fastest growing areas include King’s Cross, Southbank and Midtown fringe (Farringdon, Aldgate, Clerkenwell and Shoreditch), with major relocations including Omnicom, Ogilvy & Mather (Southbank), Google (King’s Cross) and Amazon (Shoreditch);
  • Technological innovation is helping to drive the refurbishment and redevelopment of buildings in fringe London office districts. Apple’s decision to take up to 450,000 sq ft at Battersea Power Station is an illustration;
  • The ‘Tech City’ area in London, EC1 has seen a 90% occupation growth since 2009;
  • Tech and media occupiers are prepared to pay high prices to secure the right space and specifications;
  • Future schemes likely to attract occupiers will include: Shoreditch, specifically Helical’s The Tower, EC1 (171,000 sq ft), GPE’s 148 Old Street, EC1 (162,000 sq ft) and Derwent’s Whitechapel Building, E1 (200,000 sq ft).

Metropolis occupier research backs up these trends. Our research uncovered nearly 400 unique new London Tech and Media occupier requirements for subscribers in the last 12 months totalling 6m sq ft. Most of these companies still have ‘live’ requirements.

Advertisements

Central London Office Lettings April 2016

Central London office lettings in April 2016 recorded just under 650,000 ft of deals from 40 transactions during the month. The April figure represents a fall back from the 1.4m sq ft recorded in March and is below the recent average of 1m sq ft per month.

April was characterised by 11 office deals over 20,000 sq ft, including Palantir Technologies at 20 Soho Square, W1; Charles Stanley at 55 Bishopsgate, EC2 and Capital One at White Collar Factory in City Road, EC1.

Financial services topped the table of lettings by sector, helped by the Charles Stanley and Capital One deals. This was followed by insurance boosted by Chaucer’s move to 55 Bishopsgate. Retail and transport services are also performing well. Office deals under offer have risen to over 3m sq ft and include three large pending deals in the City and Docklands, with analysts believing some deals are on hold until after the Brexit vote.

By area, the City accounted for only just over a 50pc of the floorspace let in April. The West End had another quiet month, but the pace picked up in Midtown with over 100,000 sq ft let in 5 deals. Current London office demand is calculated to be around 4.5m sq ft in the City and 3.1m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 249,000 sq ft (39% of the total), as transactions for newly developed or refurbished space converged towards the monthly average.

Some 50 new office schemes were started in the last 6 months and Cityoffices.net, which exclusively prepared the research for Deloitte’s recent Crane Survey, will publish its own analysis shortly.

Cityoffices’ Big London Construction Survey

The Deloitte Real Estate’s London Office Crane Survey, exclusively researched by Cityoffices.net and Metropolis, was published today and given wide press coverage.

The headline conclusion was that the number of offices under construction in central London has rocketed to a 20-year high and now includes 51 new office scheme starts in the last 6 months.

All the details, plus information on the next 200 schemes in the pipeline is available to all Cityoffices.net subscribers with annual subscriptions from only £750.

Contact Andy King at andy@metroinfo.co.uk

Top Ten market moves in Newcastle

A recent report on the Newcastle office market by GVA Bilfinger highlighted some of the major market movers and skakers.

1. Q1 take-up reached nearly 150,000 sq ft in Newcastle, with Sitel taking 48,000 sq ft at Quorum Business Park;

2. Accenture, the management consultant, took 15,000 sq ft of extra space at Cobalt Business Park;

3. EY (Ernst & Young) recently took 22,900 sq ft at One City Gate East, while Ubisoft took 17,000 sq ft at Haymarket Hub;

4. Litterboss is taking 12,100 sq ft at Digital House in the Team Valley;

5. Shepherd Offshore, the offshore logistics firm, has submitted plans to develop a £4m two-storey head office at the Walker Offshore Technology Park in Newcastle-upon-Tyne;

6. Newcastle University is to build the £30m National Institute for Smart Data Innovation (NISDI) at the new Science Central site in Bath Lane, Newcastle-upon-Tyne

7. Accord Healthcare is to set up a pharmaceutical plant at the former Sanofi site in Newcastle-upon-Tyne;

8. The recently completed 35,000 sq ft Stephenson Quarter Rocket scheme is rumoured to be under offer;

9. Commercial Estates Group is revamping 60,000 sq ft at Cuthbert House, while Schroders is refurbishing 10,000 sq ft at Earl Grey House;

10. The former Eversheds’ space at Central Square South will add some 50,000 sq ft to Grade A space in the city;

Metropolis continues to monitor a number of companies looking for office space in the city.