Tech and media firms take up most new City office space so far this year

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Tech companies favour the so-called City Fringe for its lower rates (Source: Getty)

Tech companies are swooping on office sites on the fringe of the City, as the sector begins to take up more new spaces than the traditionally dominant financial and professional firms.

Businesses in the tech and media (TMT) sector took up 517,069 sq ft of space in the first five months of the year, out of a total 2.25 million sq ft of spaces with new occupants, according to Savills.

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This is the biggest ever showing for the sector during this period. Tech now represents 20 per cent of the market share, ahead of financial services (14 per cent) and professional services (17 per cent).

Philip Pearce, head of the central London leasing team at Savills commented: “TMT occupiers were out of the blocks quickly this year as the sector continued to grow: snapping up space primarily on the City fringe, which offers both the type of space these companies tend to favour plus slightly lower rents than those found in the City core."

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The average grade A rent for 2017 so far in the City core is £61.90 per sq ft, whereas the City fringe, which includes Farringdon, Shoreditch, and some parts of Bloomsbury and Southwark, averages at £59.17 per sq ft.

Total City take up for the year to date is up on 2016, while vacancy stands at just 5.4 per cent, down on the 10-year average of 6.7 per cent.

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Tags: Savills