TMT occupiers moving into traditional City office locations – Knight Frank
Knight Frank says occupiers in the technology sector have doubled their take-up of office space in the City of London – the traditional home for London’s financial institutions. The firm has compared data for the first half of 2012 with 1H 2011 and found that there has been a transformational shift in occupier type, as companies such as Skype and Oracle have taken up space traditionally occupied by banks. They might once have taken office space in the West End but are now moving into the Square Mile.
Bradley Baker, head of Central London tenant representation at Knight Frank, says activity by TMT firms is not confined to areas such as Shoreditch and Clerkenwell. “In the future more City tenants may find themselves competing against tech and media firms for office space, even in more traditional locations such as Cheapside and Cannon Street,” he adds.
Major recent deals include 88,000 sq ft taken by Skype at 2 Waterhouse Square, with Weber Shandwick signing for 65,000 sq ft in the same building; Oracle acquiring 22,000 sq ft at 1 South Place; and Yammer taking 13,000 sq ft at 80 Great Eastern Street, he notes. And some deals have been taking place in core traditional City areas – such as Monetise, the online payments group, taking 42,000 sq ft at One New Change, and internet gambling firm Bwin taking 20,000 sq ft in the same building.
With the London economy gradually reweighting away from finance, Baker adds, there is also a revolution under way in terms of how companies are using space. Break-out areas and ‘think rooms’ are starting to replace rows of desks, and wifi means that workers are no longer tied to their desks.
In total, Knight Frank has found, TMT firms took up 731,000 sq ft of office space in the City during H1 2012, compared with 367,000 sq ft in the first half of 2011. The TMT sector accounted for 27% of office space take-up in H1 2012. At the start of the credit crunch in 2007, it only made up about 10% of this activity, the firm notes.
