CAPITAL WATCH ISSUE 1 2018

B ack in in 2010, the emergence of a cluster of fast-growing tech startups in east London was brought to attention of the then Prime Minister David Cameron. Winding forward, this sector is now feted as the darling of the economy, having fuelled post-recession job growth. Tax breaks for investors in early-stage companies along with the sector’s own Tech City UK body have helped support the growth in the number of startups, with high-profile advocates championing the capital’s tech talent. Of course, that’s not to say that London’s tech sector didn’t exist prior to 2010 - but it was still very much under the radar, due not least to its epicentre being located in an underdeveloped quarter of London not typically associated with fast- growing businesses. Just as London’s tech scene did not begin with Tech City, it also did not end there. Moving on from the cluster of digital business in east London, London’s tech sector is booming and is now one of the top three global tech cities alongside San Francisco and New York, having become a magnet for startups and programmers. Since Tech City was launched, technology has become more integrated throughout all industries on the back of a wave of digital transformation. New sectors such as fintech and legal tech have emerged, focusing largely on artificial intelligence and digital automation. The UK is now home to 22 of Europe’s 57 tech unicorns, the clear majority of which are based in the capital. Nearly £3 billion was invested into London’s tech companies in 2017, which now employ more than 300,000 people in London. This success has had a clear impact on London’s real estate market. Demand from technology companies shored up the central London office market in the years following the financial crisis and the sector is now a core source of office leasing activity. In the five years to 2017, the tech sector leased over 7.2 million sq ft of space in central London, second only to banking and financial services. This equates to more than 13% of total leasing volumes – a doubling on the preceding five years – as tech behemoths such as Google, Facebook and Apple have committed to ever larger tranches of space. It’s easy to see the effect of the sector on the physical workspace, with connectedness and collaboration at the heart of current workspace design. Significantly, tech employers, driven by a need to attract the best young talent, have also set the benchmark for “cool” space. Whilst slides and hammocks have since virtually disappeared from fit-out checklists, the reinvention of what a corporate workspace can look like has acted as the catalyst for a movement that has spread far beyond the bounds of the tech industry. In the following pages we explore the major factors in London’s success as a tech hub and the challenges and opportunities that lie ahead. How tech has powered up London’s success By Elaine Rossall, Head of UK Offices Research & Insight elaine.rossall @cushwake.com COVER STORY The growth of the tech sector in London has been one of the capital’s recent success stories. 03 COVER STORY CUSHMAN & WAKEFIELD