Tech take up of office space in the City doubles

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Tech firms have doubled their uptake of office space in the Square Mile, the traditional home of London’s financial institutions, according to Knight Frank.

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We are gradually seeing the London economy reweight away from finance, and this is playing out in the City office market with the likes of activity from Mimecast, Skype and Weber Shandwick.

Tech firms have doubled their uptake of office space in the City, the traditional home of London’s financial institutions, according to Knight Frank.

A comparison of data for the first six months of 2012 compared to the same time in 2011 shows the transformational shift as firms such as Skype and Oracle take on space previously occupied by banks.

Bradley Baker, head of central London tenant representation at Knight Frank, commented: “We are gradually seeing the London economy reweight away from finance, and this is playing out in the City office market with the likes of activity from Mimecast, Skype and Weber Shandwick.

“Interestingly, activity by TMT firms is not restricted to Shoreditch and Clerkenwell, and 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.

Bradley Baker added: “We are also seeing a revolution in how firms are using space due to the growing tech influence, as break out areas and ‘think rooms’ start to break up the rows of desks, and wifi negates the need for workers to remain tied to their desk.”

Technology, Media and Telecomms (TMT) firms acquired 731,000 sq ft of office space in the first half of 2012, compared to 367,000 sq ft for the same time in 2011.

The sector accounted for 27% of office take-up in H1 2012. In 2007, at the start of the credit crunch, TMT accounted for only 10% of activity.

Bradley Baker explained: “The kinds of businesses coming into the City now are the sort which would, traditionally, have taken up office space in the West End.”

Major deals include Skype taking 88,000 sq ft at 2 Waterhouse Square, Weber Shandwick signing 65,000 sq ft in the same building, Oracle acquiring 22,000 sq ft at 1 South Place, and Yammer signing on 13,000 sq ft at 80 Great Eastern Street.

Daisy York, surveyor, Knight Frank central London tenant representation team commented: “Tech firms are absolutely competing for conventional core space. We advise a number of tech sector clients who require corporate, client-facing offices in core locations supported by creative, product-development focused operations in the regions and abroad. Exposed brick is not an option for these types of firms”

While much of the activity occurred in the Northern and Western City, which is typically associated with TMT, there are examples of tech firms migrating into the traditional City Core, which is favoured by financial firms. Monetise, an online payments group, took 42,000 sq ft at One New Change, and Bwin, an internet gaming firm, took 20,000 sq ft in the same building.

For further information, please contact:
James Roberts, head of commercial research, Knight Frank, +44 (0)20 7861 1239
Bradley Baker, head of central London tenant representation, Knight Frank, +44 (0)20 7861 1256
Charlotte Baylis, commercial pr executive, Knight Frank, +44 (0)20 7861 1744

Notes to Editors
Knight Frank LLP is the leading independent global property consultancy. Headquartered in London, Knight Frank and its New York-based global partner, Newmark Knight Frank, operate from 207 offices, in 43 countries, across six continents. More than 6,340 professionals handle in excess of US$886 billion (£594 billion) worth of commercial, agricultural and residential real estate annually, advising clients ranging from individual owners and buyers to major developers, investors and corporate tenants. For further information about the Company, please visit http://www.knightfrank.com.

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Gareth McConnell
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