Advances in technology look set to boost the central London lettings market as the TMT sector begins to dominate activity.
Technology, media and telecoms companies accounted for 20% of all lettings activity in 2011, with deals totalling 1.3m sq ft, according to the latest research from Knight Frank.
Take-up in the sector last year was close to double its previous peak in 2007 of 800,000 sq ft.
The boost from the TMT market was not enough to counter the effects of a slow global economy, however, as take-up across the capital fell by 27% to 10.7m sq ft last year.
But with more than 100,000 sq ft of new requirements being launched by technology companies since the beginning of the year, 2012 looks set to be another bumper year for the sector.
The new searches come from IT company Salesforce, which has employed Cushman & Wakefield to hunt for 40,000 sq ft; O2 owner Telefónica UK, which has instructed Cluttons to find it an extra 15,000 sq ft in addition to the 70,000 sq ft it took recently at The Crown Estate’s AirW1 scheme, and from digital music company Spotify, which is searching for 20,000 sq ft through DTZ.
Media firm Saffron Digital and mobile banking company Monitise are also seeking as much as 30,000 sq ft and 20,000 sq ft respectively.
KF’s head of West End offices, Tim Robinson, said: “TMT companies are looking for the best locations to attract the best employees. My key message for the central London lettings market this year is that this sector will become a major player.”
In 2007, there were just five deals in the TMT sector in excess of 25,000 sq ft. In 2011, which saw overall leasing activity drop by 31% on 2007, there were 12 TMT deals of greater than 25,000 sq ft.
Watch an interview with KF’s central London team at www.estatesgazette.com/videos
joanna.bourke@estatesgazette.com
