London’s tech hubs are leading the capital’s rental growth, according to a September report by rent-to-rent operator Residently. The online rental site has seen strong growth across the city’s tech centres, namely Shoreditch, King’s Cross, Hammersmith & White City, Soho and Battersea.
The company gives an overview of how the tech sector has expanded in the capital in recent years: “London’s tech growth has hit an all-time high, with global firms investing heavily in London offices, despite the shadow of Brexit. In fact, London now employs
more people in the technology, media and telecoms sectors than it does in finance. The rise in collaborative and creative co-working spaces has also contributed to the success of these hubs, acting as a ripple effect on the wider local environment, as new cafés, bars and shops spring up to support workers. In particular, this “tech ripple” has transformed a number of downmarket locations across London into places where people really want to live, as well as work.
“Tech giants do all they can to attract the best talent, which means not only creating inspiring and impressive workspaces, but reinforcing their location as the best place to be. This in turn is having a knock-on effect on office rents. This is particularly prevalent in London’s original “Tech City”, which emerged in the late noughties when a cluster of web-based businesses settled in the area. Following the recession and a period of reduced rents, the area around the Old Street roundabout became affordable
to start-ups, whilst redundancies in the financial sector released significant entrepreneurial talent into the market.
“Since then, office rents have increased considerably and last year, office rents in Shoreditch overtook those in the City of London for the first time in history. The impact of this on the residential market has been substantial, with property values rising sharply over the past decade. Rental values for an average two-bedroom property (in Shoreditch) now cost £2,440 per month.”
However, Tech City’s rising office rents have caused many firms to look elsewhere. In fact, a number of Silicon Valley firms including Google, Facebook and Apple have selected other areas of London for their UK headquarters. King’s Cross has become a popular spot for both tech giants and flourishing start-ups, with Google’s £1bn HQ and Facebook’s plans to open a HQ in King’s Cross Central, which at over 700,000 sq ft, will triple the firm’s footprint in London.
According to Residently, the impact of these recent announcements combined with significant local redevelopment, has transformed King’s Cross into one of London’s hottest destinations. The firm says that rental values have increased by 13% over the past year in King’s Cross, with significant demand coming from nearby workers.