Research has found that the tech sector demands the most office space in the City of London, commonly thought of as one of the world’s leading financial hubs.
London estate agent Knight Frank predicts technology, media and telecoms (TMT) companies will acquire 1.6 million square feet of office space in the City of London in 2013, a 23 percent increase on last year.
If the estate agent’s predictions prove to be accurate then demand for property space in the City of London will have tripled in the last decade, as TMT office take-up for the area was only 454,000 square feet in 2003.
The results of the study mark the third year running when the tech sector has expressed the highest demand for office space in the London borough.
The research also revealed that tech firms are starting to move away from areas such as Shoreditch and Farringdon and into the heart of the City of London and further west towards Holborn – parts of London that have traditionally been linked with financial companies and law firms.
Knight Frank said that tech firms acquired 869,000 square feet of office space in the City of London during the first half of the year, compared to only 513,000 square feet taken by financial firms.
It added that movements from large companies – including Amazon to Holborn, Publicis to Chancery Lane and salesforce.com to the Heron Tower – helped to fuel this.
The estate agent anticipates that financial firms will take-up one million square feet of office space in the City of London by the end of the year, marking a significant increase on the 627,000 square feet of office space the sector acquired last year.
It also predicts that the second half of 2013 will be dominated by media companies seeking office space, rather than technology and telecoms firms.
News UK announced in July that it would be moving from Wapping to a building next to the Shard skyscraper in London Bridge, bringing three national newspapers with it.
James Roberts, head of commercial research at Knight Frank, said: “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 1.8 million sq ft of offices in the City in 2014.
“The tech and media firms have outgrown converted warehouse offices and are now seeking modern, high specification office buildings. These are largely found in locations that up to now have been legal or finance dominated, but the techs are arriving and transforming the occupier market.”
Techworld recently discovered that a number of tech firms are choosing to move into established office spaces in the City of London over the stereotypical warehouse conversions found in Shoreditch because they need an internet connection straight away and can’t afford to wait longer than a week for BT to install one.