Tech sector still driving the market
There has been consistently high take-up numbers from TMT household names and newcomers throughout 2018.
With global domestic tech names making commitments to London, there is little doubt that the sector will continue to expand in London in 2019.
Strong activity in London’s technology, media and telecommunications (TMT) sector was a consistent theme in 2018 and we expect this to continue into 2019. Tech firms want space that is both close to existing workforces and of a high enough quality to attract the very best talent.
TMT recorded more than 2.8 million sq ft of take-up and accounted for roughly 24% of all transactions across Central London.
Facebook’s long-anticipated acquisition of 600,000 sq ft at King’s Cross Central was one of the standout transactions. Going forward, we believe this commitment by such a well-known brand should instil confidence in the market, particularly for occupiers looking to relocate or expand.
London's West End
TMT occupiers have been active across all sub-markets, but they have been particularly dominant in the West End, accounting for over 30% of all activity in 2018. The City of London also enjoyed success in attracting both household names and rising stars from across the sector, accounting for 22% of deals.
On the leasing side we advised on several assets designed to attract occupiers from the digital, technology and media sector. We have seen The Farmiloe, Spectrum, The Bower and Herbal House all enjoy considerable success in 2018.
Herbal House, EC1, is in Farringdon, London’s hub for digital, design and creative businesses. Its design showcases all the original facets of the building and introduces tech enabled elements to create a unique industrial workplace. We developed an innovative marketing strategy which attracted significant brands to the space. Photobox pre-leased the innovatively designed lower floors, global design company, IDEO, acquired the new upper floors, and Adidas and The Open Society Foundation also took dynamic workspace.
The Farmiloe, EC1, in Clerkenwell was pre-let to concert ticket seller, Live Nation. Our London Unlimited and City Agency teams used their knowledge and insight to achieve a record rent for Aberdeen Standard.
With tech continuing to play an important role in all our lives, and global and domestic tech names making commitments to London, there is little doubt that the sector will continue to expand in London in 2019. The strongest employment growth forecast of the established business sectors further underpins this.
We expect robust take-up in 2019, driven by 0.8 million sq ft of active demand. Yet, due to the absence of any requirements on the same scale as Facebook, it is unlikely to reach the same levels as 2018. Major requirements expected to transact in 2019 include: WPP (300,000 sq ft), BT (250,000 sq ft), 20th Century Fox (80,000 – 100,000 sq ft) and The Telegraph Media Group (70,000 – 80,000 sq ft).
This article was written by Harry Murphy