TMT office news 17th April 2015

The Media & Tech (MT) sector is shifting from London’s traditional industry mecca of the Silicon Roundabout (Shoreditch) to emerging east of the City including Aldgate, Whitechapel as well as Canary Wharf and Docklands. Research from Colliers shows that East London locations, Aldgate/Whitechapel and Canary Wharf, are attracting more tech occupiers than the established ‘tech city’ area, mimicking the 2014 trend which showed tech office take-up of built space in these Eastern submarkets exceeding Shoreditch by over 100%. The shift in the tech sector is predominately credited to cheaper office rents, which is also reflected by more available space. Already within Q1 2015, 79,740 sq ft foot has been taken in Aldgate and Whitechapel compared to 8,197sq ft in Shoreditch. This mirrors the take-up trend amongst these locations shown in 2014, with 33% of the market heading to Aldgate and Whitechapel, 46% to Canary Wharf and the Docklands while only 21% of take-up was in Shoreditch. Guy Grantham, Colliers International Research and Forecast Director, commented, “In recent years we have seen Canary Wharf and Docklands beginning to challenge Shoreditch as a focus for tech occupation, culminating in 2014, with take-up of built space exceeding the traditional Media and Tech postcode. However, since 2013, Aldgate has emerged as a viable alternative for tech companies, offering a wider choice of more characterful stock at a significant discount to established media and tech enclaves. “It should come as no surprise that occupiers are looking at Aldgate, having as it does the highest vacancy within London’s submarkets (10.6%) coupled with very competitive rents that are well below City headline numbers. Equally, despite Canary Wharf’s dislocated position, it offers high Grade office space at a discount to core and fringe locations. Canary Wharf continues to attract ‘Fintech’ and wider sector start-ups. Grantham continued, “Evolving start-ups are increasingly exploring options in non-core locations, where they are able to use rental savings to allot greater capital expenditure to fitting out new space. These dynamics have driven a shift east, with areas such as Aldgate, Docklands and Canary Wharf seeing a 4.5-fold increase in Media and Tech take-up year-on-year. “The Aldgate and Whitechapel region in particular is starting to see significant relocations, and the latter will have a dedicated Crossrail station (from 2019). Canary Wharf, on the other hand, continued to attract Fintech and wider sector start-ups, again with the added prospect of new targeted ‘tech-friendly’ office development and infrastructure upgrades. “The next phase of development within this area will centre around Wood Wharf – the soon to be developed neighbouring area around Canary Wharf. It has a potential 3.5m sq ft development set to have more flexible live/ work space and preponderance of smaller scale, flexible office space ideally suited to high tech and new media.”