Shoreditch to achieve strongest office rental growth in London due to tech sector

Shoreditch has been predicted to achieve the strongest office rental growth in central London, between now and December 2020.

According to the latest Knight Frank Economics and Forecasting team, this prediction reflects the importance of technology and creative industries to London’s economy.

Southbank and Fitzrovia are ranked second and third respectively, which are also locations with a wide range of with firms active in the digital economy.

In 2017, office take-up by technology, media and telecoms (TMT) firms increased by nearly 8%, to 3.3 million sq ft, surpassing the financial sector which acquired 1.5 million sq ft.

Knight Frank noted that the current wave of new technologies in development, from driverless vehicles to artificial intelligence, will also result further growth to come from tech.

This will have a knock-on impact for offices in districts that are popular with the TMT sector, such as Shoreditch and Southbank.

These changes are coinciding with an expected squeeze on available office supply in 2018, with just 3 million sq ft of vacant new office space completing development this year, in a market which saw 13.8 million sq ft of office space let to occupiers in 2017.

James Roberts, chief economist at Knight Frank, commented: “Tech firms essentially live in a borderless world, so the uncertainty of Brexit has less impact on them.

“This is why we see office districts popular with this key sector enjoying strong momentum over the next three years.

“Inevitably, 2018 will be a relative flat year for districts less popular with tech firms, due to the political uncertainty.

“However, over the next few years tech’s success will filter through to the broader London economy, as sectors such as finance, law and accounting find themselves working more for clients in the digital space. This will export rental growth to other districts in central London.”