Tech take-up swells City of London offices

[Published July 2012 and updated July 2024] A new report on the subject reveals that a growing number of technology companies are setting up operations within the City of London office space. As a result, Knight Frank, the real estate consultancy firm behind the study, insists that financial service businesses will increasingly find themselves competing with tech companies for offices in the so-called Square Mile.

Offices in the City of London have long been the home of banking and insurance groups from around the world, but the scale of space occupied by technology, media, and telecoms (TMT) companies has increased sharply in recent quarters. Indeed, Knight Franks’ figures suggest that almost exactly twice as much office space was acquired by TMT firms in the City during the first half of 2012 as compared with the previous year.

With somewhere in the region of 730,000 sq ft of office space newly taken up by TMT companies in the Square Mile during the first half of 2012, the industry accounted for over a quarter of all office deals done in the district in the period. But as Knight Frank’s expert points out, it only accounted for around 10 percent of office space deals done in the City prior to the financial crisis that hit five years or so ago.

Interestingly, the influx of technology-based businesses in the traditionally finance-focused area has led to some notable changes in how the local offices are being used. According to Knight Frank, Wi-fi connectivity is becoming an absolute must and ‘thinking areas’ are starting to feature as office layouts are adjusted.

“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,” said Bradley Baker, head of Central London tenant representation at Knight Frank. “The kinds of businesses coming into the City now are the sort which would, traditionally, have taken up office space in the West End,” he added.

London currently has several high-profile office space developments underway, including those along Fenchurch Street and Broadgate in the City. Meanwhile, along the south bank of the Thames now stands The Shard development, which is the tallest building in the European Union and home to several hundred thousand square feet of available London office space.

Editor’s notes: In 2023, the TMT sector counted for 15 per cent of London’s total office space take-up. This compared to its share of 17 per cent in the previous year and the longer-term average of 21 per cent.