Technology media and telecommunications firms have taken up the largest amount of office space in the West End.
Office space in London‘s West End now has more tenants in the telecoms, media and technology sectors than in the traditional areas of banking and finance for the first time since the start of the millennium.
The findings come as part of a report by commercial property analysts King Sturge who state that companies in the technological and new media business account for 23% of leasing and rent, compared to 14% in the financial services sector.
While the new technology and media firms are currently enjoying the adulation of the City’s financial district – due in part to Facebook’s recent £31 billion valuation by Goldman Sachs – analysts have warned that there could be another burst bubble to go with the 2001 financial crisis in the dot.com industry.
It is the first time since 2000 that the telecoms, media and technology sectors have occupied more office space in West End commercial real estate than the financial services. It is thought that a similar pattern will repeat itself this year.
At the moment office space leased in the West End is apportioned so that 798,000 square feet is taken up by the technological, media and telecoms industries, whilst 422,200 square feet of office space is home to financial firms.
Presently three of the biggest technological media companies are looking at taking up commercial office space in London. Google, Facebook and Twitter are all interested in a central London location due in part to the benefits it can offer their firms.
Catherine Jones, King Sturge’s head of West End office research said: “TMT is one of the few business sectors to have seen genuine expansion, and demand is such that occupiers are looking beyond the traditional boundaries of Soho into the wider West End market.
“This is also being driven by the availability of large, newly developed grade A space offering more attractive rental terms than the prime rents seen in the core of the West End. Furthermore, many of these new buildings, with large floor plates, are often efficient ‘cost in use’ for their occupants,” she added.