Driven by impressive growth, tech companies looking to scale up are making the move out of Shoreditch. Startup tech firms are too finding that Shoreditch just doesn’t cut it. With the community impetus of being based in the Tech hub becoming less of a factor, they are waking up to the advantages provided by office space a little further afield.
Could this be the end of Tech City as we know it?
Big name tech firms aren’t investing in Shoreditch
Business in the tech sector is booming, recently reported to be growing at twice the rate of the wider UK economy with talent and investment pouring in. But as tech firms continue to grow in size and confidence, they are finding the availability of physical space near the Silicon roundabout a restriction.
Though there are few businesses looking for premises like Google’s 863,000 sq ft planned office in King’s Cross or Apple’s new London HQ at the site of Battersea Power Station, many firms are nonetheless outgrowing the available options in Tech City. That includes firms like Deliveroo, which recently announced plans to recruit an additional 300 software engineers at a new office in Cannon Street.
Ensuring continued space to grow is one of the biggest challenges faced by growing companies. Built specifically to cater to the requirements of fast-expanding tech firms, the new Here East hub in the Queen Elizabeth Olympic Park hopes to take advantage of growing demand. The 1,200,000 sq ft campus is supported by world-leading digital infrastructure with almost unlimited bandwidth technology and high capacity power.
Tech city doesn’t have the infrastructure
Sites like Here East throw the disadvantages of Shoreditch into sharp relief. Office spaces in Shoreditch and nearby Clerkenwell, located in converted buildings and Victorian warehouses, simply do not have the capacity or technical specification to house larger firms.
Meanwhile, the Old Street hub is plagued by poor internet connectivity, a particular problem for tech firms or indeed any modern business dealing in the fast-growing Internet of Things. One example includes Snap, the company behind messaging app Snapchat, which is looking to expand its London office from around six to 75 staff members.
So, as tech giants grow too big for their boots and are forced out of their traditional Shoreditch stomping ground, poor infrastructure as well as mounting rental costs seem to be heralding the end of Shoreditch as a tech hub for startups and entrepreneurs as well.
Startups are moving to office space in the City
With Shoreditch over-stuffed and under-equipped, it’s natural that the tech scene will spread beyond its spiritual home. Many startups are already choosing their location based on other considerations including proximity to key partners or clients: health tech startups want to be near medical centres they can embed in; fintech companies are drawn to the businesses they sell their services to.
But tech firms aren’t fleeing too far. In many cases, new tech start ups look as though they will soon be invading the bankers’ turf, moving into the City. The recent boom in co-working and serviced office spaces have mitigated the risk and costs of renting office space in the City of London, particularly for smaller businesses. The Square Mile boasts superfast broadband coverage, too.
Entrepreneurs just starting out can find affordable coworking and hot-desking memberships to start building their network right in the centre of London’s ever-modernising financial district. Businesses seeking permanent space are finding Liverpool Street office space a fully serviced option to help avoid long leases and hidden overhead costs. There are also subsidised spaces like Bathtub 2 Boardroom, which offer space and support to particularly promising young companies in the City.
Regardless of the great tech migration of high fliers like Google and Facebook away from Shoreditch, it does signal that post-Brexit London, with its skilled workforce and infrastructure, looks set to remain a very attractive location for tech firms for a while yet. It just so happens that those firms are being drawn elsewhere, to Kings Cross, Battersea, the City, or further afield.