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Here at Morgan Pryce we have the pleasure of working with various start-up companies to help them find their first office space, whether they are looking for offices in the City, or offices in the West End. When acquiring office space we work very closely with the client, almost on a day-to-day basis, and we spend a lot of time understanding how their business works as well as how it has grown and expects to grow. With our expanding clientele of start-up companies, be they new hedge funds, private equity companies or those from the technology/media/telecommunications (TMT) sector, we have seen how London, a global centre of finance, plays host to these companies to a greater extent than the larger, more well-established firms.
One example, in particular, is of the growing number of fintech practices – also known as financial technology, which are using technology alongside data analysis to reinvent the way businesses conduct themselves in areas such as peer-to-peer lending or foreign currency exchange. These companies are now changing the face of the financial industry; the owners of these new practices claim that they are able to innovate quickly in these new set-ups as well as providing transparent and trustworthy advice.
London’s Tech City, Silicon Roundabout in Old Street, east London, supports many of these types of companies and there are now over 300 technology companies occupying office space in this location. The fact that US companies such as Amazon and Google have chosen to invest in offices in London helps to attract start-ups in the fintech industry even further into the capital.
This property eco-system is what makes London so favourable to an array of companies; however, even though the future does look promising for fintech in the capital, there are still a few matters that need clearing up, such as regulation and limits to global expansion, which can cause concern for entrepreneurs. One example would be that of Wonga, the short-term loans fintech company that has received both criticism over its high interest rates and complaints about its security.
With all else aside, start-up companies have hurdles to cross when acquiring new office space and the main one is in respect of all the upfront costs required. These can be hard to meet for entrepreneurs, especially at a time when it is so crucial to re-invest as much money as possible back into their company. A start-up company will usually have to pay a deposit of up to 12 months’ rent to the landlord as well as invest in fitting out the space. There is also the commitment involved when taking on a new lease (usually five years). As noted by Christina Weguelin, of Morgan Pryce, “With these points to take into consideration we usually suggest our start-up companies consider off-market opportunities where the landlord may be redeveloping, or where a tenant may be subletting or assigning. These options provide more flexibility in the length of the lease and the cost of the space which is so crucial to a company at the beginning.”
This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.