European cities see rise in TMT office demand

[Published in 2013 and updated April 2023] Several of the largest and most economically significant cities in Europe have seen a rise in demand for offices from technology, media and telecoms (TMT) companies and the trend is set to continue, according to a new report.

The property advisor BNP Paribas Real Estate has been analysing progress in the sector and revealed that TMT businesses took up 28 per cent of all office space in London during the first three quarters of 2012. That uptake reportedly accounts for 1.77 million sq ft of London offices.

Meanwhile in Germany, the TMT sector reportedly accounted for 23 per cent of all office space take-up in Munich in the first nine months of 2012. And while the most popular location in the country for TMT firms is Munich, Dusseldorf also saw a notable rise in demand from the sector.

BNP Paribas Real Estate’s managing director for Central London Dan Bayley said: “The growth in the significance of TMT in Europe is set to further increase. This is good news, as TMT companies step up to fill part of the gap left by financial services firms.”

“Interestingly, the research shows how this key occupier group identifies with emerging locations/satellite markets within London and Paris, as they tend to base themselves within flexible, edgy and modern office space.”

According to an earlier study from the same real estate advisory firm, around 54 per cent of all TMT office space occupiers in London are expecting to increase the scale of the workforce in the city over the course of the next three years. In fact, the UK’s TMT sector is predicted to account for some 4.65 million sq ft of office space before the end of 2014.

Editor’s notes: In 2022, the total London office space take-up was 10.1 million square feet. Of this, 171,7000 square feet, or 17 per cent, was rented by companies in the TMT sector.

Down from the 2021 percentage of 29 per cent.

In 2022, the banking & finance sector dominated leasing activity in London and represented 27 per cent of office lettings. The professional services sector was a close second accounting for 24 per cent of office space deals.

It is expected, in 2023, that take-up by those in the TMT sector will be lower than in 2022 due to the worldwide job cuts that started in the Summer of 2022 and have continued to roll out in companies including Amazon, Google, Meta, Microsoft, Netflix, Salesforce, Twitter and Zoom.