Firms operating in the technology, media and telecommunications (TMT) sector have been the most active tenants in London's Square Mile. New research published by Knight Frank revealed organisations working in this industry took on 731,000 sq ft of office space in London during the first six months of this year, a significant increase from the 367,000 sq ft recorded in the same period in 2011. The TMT sector now accounts for 27 per cent of office take-up activity, indicating it has grown substantially since 2007, when such businesses were responsible for just ten per cent of office moves.
Head of central London tenant representation at Knight Frank Bradley Baker stated: "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." Skype and Oracle, for instance, have recently taken on offices that were previously occupied by financial institutions. Mr Baker added the type of companies seeking space in the City would previously have been more likely to target West End locations.
A report published this week by CBRE revealed London's West End is the second most expensive office market in the world, with average annual occupancy charges in the district standing at USD 220.15 (GBP 140.62) per sq ft. Hong Kong's central business district is the only place where it costs more to lease office space, the firm revealed. The high fees associated with renting offices in the West End could be one reason why businesses are turning to the City and other locations in the capital to find new premises.
Mr Baker added there are also new trends in how office space is being utilised, which are being led by TMT organisations. This involves the use of break-out areas and "think rooms", he explained, adding the introduction of Wi-Fi has resulted in greater flexibility for office workers, as they no longer need to work in the same place all day.
- Wednesday 18 July 2012