How is Shoreditch the world's most expensive tech district?

According to new research by Knight Frank, Shoreditch is the most expensive tech district in the entire world.

It supposedly holds intense demand for office space, meaning rents are far higher than those in the likes of San Francisco, and nearly double those in Brooklyn. The 2018 Global Cities report analysed the cost of office space in the tech and creative districts.

Rents can reach around £69 per sq ft in Shoreditch, and Knight Frank’s analysis shows many European counterparts offering more affordable workspace for tech businesses.

Eamon Fox, partner and head of office agency at Knight Frank in Leeds, commented: “Recruitment and retention of talented staff is not just about the benefits package. Having an office that is both an inspiring and enjoyable place to work is now a critical, cost-effective way to successfully attract the most talented employees.

“Our future offices must break the mould of the past two decades. If organisations want to attract the best and keep their workforce, they need to create spaces that their staff will want to work in.

“The newest generation of workers expect their office to be an inspiring and enjoyable place to work… The new ideal office combines collaborative spaces with individual work areas, [and] amenities that encourage people to think of work as an extension of home.”

In Berlin’s Potzdamer Platz office, rents are just £31 per sq ft, while the city centre in Amsterdam offers space at £26 per sq ft.

James Nicholson, a partner of Knight Frank Tech, added: “Whilst Shoreditch is just one submarket favoured by tech and creative firms, this submarket is the poster child for the growth of London’s tech driven evolution - the high rents reflect how greatly tech and creative firms value having an office in the capital.

“Since 2011, the technology, media and telecoms or TMT sector overtook finance as the largest source of office demand in London, and has held that leading position ever since. As the tech ecosystem in London matures, companies have demonstrated a willingness to pay more, to create the best possible workplace for staff.”

It has been said that Brexit could disrupt London’s tech sector, so James Roberts, chief economist at Knight Frank, concluded: “To maintain its position, London will need to attract and retain the world’s best talent, and that means works visas. Support for London’s thriving tech industry should be higher on the government’s list of priorities.”