London’s Shoreditch is world’s most expensive tech district

Share
ClubRooms-in-Shoreditch-940x407
ClubRooms in Shoreditch. Image: http://www.shoreditch-officespace.co.uk

According to a survey by estate agent Knight Frank, Shoreditch is now the most expensive tech district in the world, with intense demand for office space pushing rents higher than those in Mid-Market, San Francisco, and almost double those in Brooklyn, New York.

The 2018 Global Cities report, which analyses the cost of office space in the tech and creative districts of the world’s leading cities, identifies Shoreditch as the world’s most expensive tech district with rents of $90.75 per sq ft. That’s almost as high as prime rents in London’s main financial district.

Shoreditch is followed by Mid-Market in San Francisco, where rents are $77 per sq ft, and Silicon Docks in Dublin ($76.30) which has become the European base for many tech corporates including Twitter and Google. The top five of the list is completed by the CBD: Rama 1 in Bangkok ($74.25) and the 1st, 2nd and 9th districts in Paris ($74.00).

Knight Frank’s analysis shows that a number of European cities offer more affordable workspace for tech and creative businesses. In Berlin’s Potzdamer Platz office rents are just $40.70 per sq ft, while the city centre in Amsterdam, which is home to the city centre’s burgeoning tech sector, offers office space at $34.45 per sq ft.

Meanwhile, despite boasting some of the most expensive office buildings in the world, Hong Kong, Shanghai and Singapore all provide affordable office space in their emerging tech districts.

In Cyberport, the heart of Hong Kong’s tech sector, office rents are $36.90, which is 90% lower than rents paid in the city’s skyscrapers. Similarly, Zhangjiang Hi-Tech Park in Shanghai and One North in Singapore offer rents significantly below the city average at $27.50 per sq ft and $41.45 per sq ft respectively.

Says James Nicholson, Knight Frank Tech partner:

“Whilst Shoreditch is just one submarket favoured by tech and creative firms, this submarket is the poster child for the growth of London’s tech driven evolution – the high rents reflect how greatly tech and creative firms value having an office in the capital.

“Since 2011, the technology, media and telecoms or TMT sector overtook finance as the largest source of office demand in London, and has held that leading position ever since. As the tech ecosystem in London matures, companies have demonstrated a willingness to pay more, to create the best possible workplace for staff.

Adds James Roberts, Chief Economist at Knight Frank:

“The fact that rents in Shoreditch exceed those in Brooklyn and Mid-Market San Francisco underlines London as a world-leader in tech.

“However, while there has been much debate on how Brexit will affect London’s status in financial services, the impact on the burgeoning tech sector has been overlooked. To maintain its position London will need to attract and retain the world’s best talent, and that means works visas.

Office rents in Tech Districts

  City Tech District Prime Rent (US$ per sq ft)
1 London Shoreditch 90.75
2 San Francisco Mid-Market 77.00
3 Dublin Docklands 76.30
4 Bangkok CBD : Rama 1, Sathorn, Sukhumvit Soi 21 74.25
5 Paris 1st, 2nd and 9th Districts (Cité Financière ) 74.00
6 Boston Seaport District 72.00
7 Los Angeles Playa Vista 62.00
8 New York Brooklyn 56.05
9 Beijing Zhongguancun 55.05
10 Washington DC NoMa (North of Massachusetts Avenue) 51.25
11 Austin The Domain 44.50
12 Seattle South Lake Union 44.00
13 Dubai Dubai Media City 43.55
14 Singapore One North 41.45
15 Berlin Potzdamer Platz 40.70
16 Toronto King & Spadina 39.90
17 Hong Kong Cyberport, Pokfulam 36.90
18 Miami Coconut Grove 35.00
19 Chicago Fulton Market District 35.00
20 Amsterdam City Centre 34.45
21 Sydney Pyrmont 33.80
22 Melbourne Richmond 32.05
23 Shanghai Zhangjiang Hi-Tech Park 27.50
24 Mexico City Santa Fe 27.30
25 Delhi Gurgaon (Cyber City) 20.40
26 Seoul Guro-gu (Guro Digitial Complex) & Geumcheon-gu (Gasan Digital Complex) 14.65
27 Madrid Julian Camarillo area 13.65
28 Kuala Lumpur Cyberjaya Office Market 11.55
29 Bengaluru Whitefield 9.65
Chris Price