New Office? Where?
The East London area between Shoreditch and Old Street; Silicon Rounabout and Tech City, with their options for co-working and shared spaces, may seem like logical choices. On the other hand, more economical areas like Stratford or Hoxton may be more attractive. And these days, there's a third option: start-ups can follow the example set by big tech companies like Amazon, and look to the City for their new workplace.
Why look for a workplace in the City?
Our latest reports for Q2 2017 show that office space in East London is £70 per sq foot , now comparable to space in the city centre, having more than doubled over the last few years. Plus, in the first half of 2017, occupational costs have risen by £10 per sq ft and in popular tech areas it is already as high as £22 per sq ft.
Yet it’s not just increasing office rental fees that explain the recent surge in the number of tech start-ups in the city. There are a number of other factors to consider.
- Tech/creative companies want to maximise space efficiency and need good ventilation and air conditioning, which office spaces aimed at start-ups cannot always provide
- City space, in contrast, offers high levels of office specification and a well-established supply pipeline
- Tech companies are working more and more with City-based firms and so it makes sense to be located nearby
- The City offers tech start-ups excellent transport and Crossrail links, great internet speeds and strong power capacities
- Restaurants and retail offerings in the City area are attractive and a big selling point for potential office lease holders.
Will start ups really be looking for office space in the City?
Yes. The fact is, as tech start-ups are developing and turning into big companies, they are naturally gravitating to more corporate locations. And, post-Brexit, we may find City buildings accommodating new types of occupiers too.
Arriving in the City will not only affect the tech start-ups. The City itself will be influenced by start-ups and their employees. As big finance and legal industry players increase their technology bases, we can expect to see mergers of office lifestyles. Maybe even more relaxed dress codes. And who wouldn’t want to see more short sleeves and sneakers around the City in the Summer time?