A rise of 23 per cent in office space acquisition by technology, media and telecom (TMT) businesses has been predicted by Knight Frank Research.
Its new research shows that 1.6 million square feet of office space is expected to be snapped up by TMT ventures in 2013 in the City of London, an increase of 23 per cent on the previous year.
Knight Frank finds that 2013 will mark the third consecutive year that TMT firms have been the largest source of demand in the City of London – and activity is now spreading to locations outside of the City, including Shoreditch and Farringdon.
The study cites new developments such as the space taken by Amazon at Sixty London, Holborn Viaduct and Salesforce.com at the Heron Tower as examples of the increase in floor space.
James Roberts, head of commercial research at Knight Frank, comments, ‘The City’s TMT cluster has seen strong growth in recent years, and I see further expansion ahead.
‘Whereas a few years ago, TMT growth in the City was largely a fringe operations, it is now broader-based. Sixty London, 200 Aldersgate and Heron Tower are buildings where I would more expect to see legal and financial firms taking space, than tech and media firms.’
Roberts adds that Amazon will have other technology companies as neighbours now, such as Skype and Lastminute.com.
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Looking at activity for the second half of 2013, Knight Frank believes that moves by the likes of News International and Olgilvy & Mather (who are both taking out new sites) will continue to drive demand from the TMT sector. Already this year TMT office space acquisition has outstripped that of the financial sector by 839,000 square feet to 513,000 square feet.
‘Tech and media firms have outgrown converted warehouse offices and are now seeking modem, high specification office buildings,’ Roberts says.
‘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.’