Member Article

Startups cool on Shoreditch and Tech City as flight to Clerkenwell and Soho heats up

Growing headcounts and rising rents in London’s prototypically hip tech hubs such as Shoreditch and Tech City have pushed more startups to other enclaves in the capital, according to new research by Hubble.

The flexible office space marketplace has crunched search data on its platform from July 2016 to March 2017 and found that companies searching for space in Shoreditch has fallen by 10% after previously holding the top spot as the most searched for area.

Looking at data for SMEs who have a headcount of ten or more, the firm found that Clerkenwell and Soho were the new hottest areas for startups and smaller businesses looking for office space, constituting 21% and 24% respectively of all searches.

Chief Executive Officer and Co-founder at Hubble, Tushar Agarwal, believes the figures highlight the increasing difficulty of finding good-value office space in the East London hub, as rising demand and larger companies make the area their home.

He added that the boom in larger SMEs as the startup scene has matured over the last decade has also meant a change in requirements of those searching on its platform.

“When we started Hubble in 2014, our marketplace helped small startups find affordable shared office space in Shoreditch and Tech City,” he explained.

“Now we have more than 10,000 SMEs signed up, who have different priorities. These bigger companies want the vibrancy of a shared office space, but as Shoreditch rents rise, they’re looking at more central locations like Clerkenwell and Soho, with better transport links, similar prices, and their own creative vibe and buzz.”

Hubble has also revealed that it has experienced an uptick in the number of SMEs hunting for flexible space since the Brexit vote, something Agarwal credits to attempts by businesses to hedge against the uncertainty that lies ahead.

He added: “We have seen interest grow from larger companies and SMEs that would have traditionally taken on a long-term conventional lease, but are opting for a flexible option instead where they have more control over their costs and the term they commit to.

“This is increasingly being seen as a hedge to the uncertainty of the London economy as Brexit unfolds, and SMEs navigate new rules around business rates.”

Where SMEs are searching for flexible office space in London (Jul 16 to Mar 17)

• Soho - 23.6%
• Clerkenwell - 20.6%
• Shoreditch - 14.4%
• London Bridge - 9.8%
• Kings Cross - 9.6%