0207 692 0608
Worldwide Office Space & Virtual Office Solutions
MENU

LOCATION BECOMES MAJOR FACTOR
FOR STARTUPS IN LONDON

CHRISTOPHER GOODFELLOW
Now more than ever, London Startups feel that their office location defines who they are as a business...
City Office provides worldwide Office Space and Virtual Office Solutions, and our London team prides itself in its knowledge of the different advantages offered to businesses.

The City

The City plays home to one of the most important financial districts in the world. The so-called Square Mile stretches from the Strand in the east to the Tower of London in west London, and the financial industry dominates the area's office space.

However, a burgeoning startup scene can be found in the midst of legacy financial institutions like the London Stock Exchange and the Bank of England, and over 7,600 companies incorporated in the district last year.

The City is leading the capital for new office construction too, with 22 new projects breaking ground last year that will add 2.1 million sq ft of space.

"This market accounts for almost three quarters of the volume of new space being constructed and now accounts for 54 per cent of office construction across central London," according to the London Office Crane Survey.[1]

Simeon Howard, director of City Office, adds the lack of availability in the West End has pushed developers to look to the City for options.

"We have a huge thirst for office space in the area due to the tech explosion, but mainly for the simple reason that you're getting much better value for your money, by opting for space in the City," says Howard, adding enquiries for these properties doubled in the last year.

That means your company could benefit from the reputation and visibility the area offers, particularly if you find you're priced out of other areas.

Shoreditch

Shoreditch is the central point of Silicon Roundabout, a world-famous hub for media agencies and tech firms. The area earned the moniker in the late noughties just before TweetDeck was sold to Twitter for an estimated £25m[2], marking the start of a series of high-profile companies to come out of the space.

Today it's become the startup capital of the country and over 23,000 new companies were launched there last year, considerably more than any of the other district considered in this report.

Simeon says the government has been instrumental in helping the area gain exposure.

"Shoreditch was always known for being a trendy place and when the startup scene exploded, that's where everyone wanted to be. It was much more affordable than taking space in the West End, especially when you're looking for big open space, with lots of room for quirky things like having a ping pong table."

The level of promotion and support provided to startups in the area is demonstrated in the use of the government's Start Up Loans. The district sits in the constituency of Hackney South and Shoreditch, which was the top recipient of the scheme, with 243 loans from the government since 2012, providing startups in the area with an average of £6,248 per business and a total of £1.5bn.[3]

Mayfair

It's unlikely there's a district in London that offers a better brand for your business than Mayfair. The area in west London is dotted with 19th century regal Regency architecture, hedge funds, headquarters and real estate businesses.

"Mayfair is synonymous with prestige and exclusivity," says Simeon, who has operated City Office from Berkeley Square for ten years. "If you see a company having office space in Mayfair, then it strongly lends to the idea that the business is financially sound and securely established as an organisation."

That reputation doesn't come cheap and prime office space in the area can cost £250 per sq ft, although Knight Frank gave an average price of £102.50 per sq ft last year.[4]

Simeon estimates the amount of demand for office space in the area has increased by between 50-60 per cent in the last year alone.

However, that doesn't mean the location is dominated by legacy businesses. Nearly 2,000 startups launched in Mayfair in 2014.

Canary Wharf and the Docklands

Commercial development has stagnated somewhat in Canary Wharf and the Docklands area, with plans focusing on huge residential skyscrapers. That said, it remains hugely popular with companies looking for a base in central London.

Office take-up during 2014 totalled 1.2 million sq ft in Canary Wharf, that's more than double the previous year and the highest level seen since 2010. This happened to a background of falling supply, which has dropped 21 per cent in the last 12 months.

Prime rents in Canary Wharf remained at £36.00 per sq ft with the likelihood that they will increase in the short term.[5]

Today, developers are looking to combine office and residential development and last year brought a green light for the financial hub's first major expansion since the financial crisis. The Canary Wharf Group's project included 3,000 new homes, and offices targeted at technology start-ups and creative media.[6]

"It's a strong departure from the past, where Canary Wharf was famous for its high rise banking credentials," says Simeon. "Skyscraper residential towers are a new phenomenon in London and there are now numerous plans being put forward to grow this sector out massively."

Canary Wharf had the third highest number of startups of the five regions in this article, with 3,657 new businesses launching in the area last year.

Hackney

The London Borough of Hackney starts in the north eastern edge of the City, but is remarkable different in its character and demographics.

"Hackney could become the new Shoreditch, but it will take more time for it to happen as the area is in desperate need of regeneration," says Simeon. "Over in Shoreditch, supply is low and demand is high, so rates have soared and it's just not cheap anymore."

The cost increase in Shoreditch means companies are looking for the next best thing and Hackney has benefitted from this increase in interest; it may provide the ideal spot for your business, particularly if you're interested in the media or technology, and the fantastic networking opportunities the area offers.

A great example of the area's regeneration is the new Hackney Fashion Hub[7], a huge regeneration project aiming to bring a world class shopping experience into the heart of Hackney. And entrepreneurs in the area just signed its first Hackney Business Charter, pledging to support small businesses in the local area.[8]

"Projects like this and many others will help to improve the Hackney's status dramatically and as a consequence, you'll see a perpetuating flow of businesses into the area," Simeon adds. "We have seen an increase in businesses looking for office space in Hackney and we see great potential here, so are looking at ways in which we can support this trend."

That said, of the five London areas considered here Hackney recorded the lowest number of startups in 2014, with just 1,255 new businesses registering with Companies House.
REFERENCES
[1]  This market accounts for almost three quarters of the volume of new space being constructed and now accounts for 54 per cent of office construction across central London

http://www2.deloitte.com/uk/en/pages/real-estate/articles/crane-survey.html


[2] The area earned the moniker in the late noughties just before TweetDeck was sold to Twitter for an estimated £25m

http://www.theguardian.com/business/2011/may/27/twitter-buys-tweetdeck


[3] 243 loans from the government since 2012, providing startups in the area with an average of £6,248 per business and a total of £1.5bn.

http://www.startuploans.co.uk/


[4] Knight Frank gave an average price of £102.50 per sq ft last year

http://content.knightfrank.com/research/685/documents/en/2014-2341.pdf


[5] Prime rents in Canary Wharf remained at £36.00 per sq ft with the likelihood that they will increase in the short term.

http://content.knightfrank.com/research/104/documents/en/q4-2014-2655.pdf


[6] The Canary Wharf Group's project included 3,000 new homes, and offices targeted at technology start-ups and creative media.

http://www.theguardian.com/business/2014/jul/22/canary-wharf-spreads-east-new-towers-wood-wharf-new-homes


[7] Hackney Fashion Hub

http://www.hackneyfashionhub.co.uk/


[8] Entrepreneurs in the area just signed its first Hackney Business Charter

https://bdaily.co.uk/entrepreneurship/01-04-2015/over-90-hackney-business-leaders-sign-first-business-charter/
CONTACT INFO
Please enter your contact details in the boxes below
*Name
*Email
 Contact No.
LIVE CHAT SUPPORT
      ✖
Helpdesk
City Office Support
Email me the chat transcript
EMAIL TRANSCRIPT
      ✖
Please enter your details below and we will email you a transcript of the live chat.
*Name
*Email
 Contact No.
LIVE CHAT SUPPORT
BACK TO TOP
  • SOCIAL
Your City Office Ltd | Registered In England and Wales. Reg. No. 05711850 | VAT No. 918 6665 82
Reg. Office: Berkeley Square House, Mayfair, London, W1J 6BD | 0207 692 0608 | All Rights Reserved.
View Mobile Version | Contact Us | Terms & Conditions | Copyright 2017.
SecurityMetrics Credit Card Safe