New research by Colliers International has revealed that technology and media firms are still contributing towards high demand for commercial property space in the City of London.
The TMT sector (technology, media and telecoms) has now increased its net amount of office space in the City by 15,000 sq ft in the first three months of the year, meaning that it is still the largest business sector in the capital city when it comes to office demand.
In total, the sector was responsible for taking up 1.2 million sq ft, or 40 per cent, of commercial property in the first quarter of 2013. The latter figure was particularly high in the West End, with 63 per cent of all space being taken up there being by TMT firms, especially boosted by Google's occupation at King's Cross.
Much of this demand is common for the West End, but with rising rental rates in the past few years, many companies have been shifting their gaze elsewhere in the capital city. Amazon's 200,000 sq ft occupation at AXA Real Estate’s Sixty London Scheme on the Holborn Viaduct is an example of this. It is also important that only a quarter of these technological take-ups was larger than 5,000 sq ft.
All of these positive trends are in contrast to the banking sector, which saw its occupancy in central London decline by five per cent, or 629,000 sq ft, over the same period.
Guy Grantham, director of research at Colliers International, said: “Whilst the banking sector is on the back foot, media and tech continues to be a major contributor to positive absorption in the City market. Tech occupation has increased by over 28 per cent in the City market since 2009, up from 5.6 million sq ft to its current level of 7.2 million sq ft."