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Research by Colliers International shows that tech and creative businesses are struggling to find appropriate office space in London.
This is resulting in an increase in rents and, in some ways, pushing these sectors to look creatively at the space they need.
Traditionally, these sectors have opted for warehouse- or loft-style open-plan spaces, where they can reflect their own identity, many of them in areas such as Shoreditch. However, a continuing lack of such spaces, resulting from steady demand and a limited stock, has meant that media and tech occupiers are beginning to look at corporate-style space.
This does, however, have its advantages. Many flexible office spaces are in such buildings, allowing for terms that can be easily changed, both in respect of rent and space.
Another trend noticed by Colliers is the arguably inevitable leaving of ‘Silicon Roundabout’, which in some ways is a victim of its own success, with popularity leading to rents that are out of reach for many start-ups. Instead, businesses are looking to move to areas such as Whitechapel, Aldgate and Canary Wharf, where cheaper rents can be had.
The research carried out by Colliers also notes the patterns emerging in the rest of the UK. These include strong growth in Birmingham, Bristol, Leeds and Manchester, where media and tech businesses continue to demand space. Such space, however, can also be thin on the ground in these areas, as the warehouse-style spaces are used for the more profitable conversions to residential.
However, this was in contrast to Cardiff and Edinburgh where rents paid in the media and tech sectors have fallen year on year, partly due to a larger stock of secondary office space.
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.