It seems almost impossible to glance at any industry website or relevant publication without someone waxing lyrical about the ‘next big tech cluster’.
Croydon. Wokingham. We recently heard a rumour a tech cluster is forming on the last carriage on the Northern Line from Totteridge & Whetstone on Tuesday afternoons.
We exaggerate…but only slightly! There seems to be an obsession with labelling every postcode with a software company ‘The Next Tech City’.
Elements of the media have sought to highlight perceived shortcoming of the Silicon Roundabout cluster. Whether it be issues surrounding connectivity or, increasingly, property issues. Price, availability, flexibility of terms – all have been criticised in East London, and have formed the basis for other areas being extoled.
Shoreditch Office Space has extensive experience in the Tech City property market, and we’ve decided to dispel a few myths that seem to have been propagated about finding work space in the capital.
Take a look and see which ones you recognise:
Firstly – “Shoreditch is too expensive”.
Clients who take space in Shoreditch will pay, on average, £21 per sq. ft less for their space than they would for an equivalent office in the West End. £15 less than The City. £10 less than Clerkenwell. We see a pattern emerging.
Rental prices across the capital have gone up, but Shoreditch continues to represent the
best value for money on work space in Central London. Low prices in years gone by have allowed East London to maintain its ‘bargain status’ despite these increases. Like all sub-clusters, East London has not been immune to the recovery of the property market and the consequential cost rises. It has, however, continued to represent comparative value.
Secondly – ‘There isn’t the necessary work space’.
Shoreditch is a unique case in London. In the last 18 months, the number of co-working and shared work spaces has grown exponentially. Shoreditch Works recently opened its third location, the Shoreditch Village Hall, on Hoxton Square, offering event space to a variety of tech and community projects. Their flexible approach to event and work space makes for an ‘easy-in, easy-out’ process for start-ups that don’t have the capital to lay out large deposits or commit to long terms.
For larger occupants, there are a number of developments in the pipeline for East London to expand the office space available. The White Collar Factory, positioned overlooking Old Street Roundabout, is around 18 month away from completion, offering 226,000 sq. ft of office space. A number of other properties are also coming to the market that will help to swing the market conditions back in favour of tenants.
Thirdly – ‘Landlords aren’t flexible enough’.
Start-ups invariably have issues around securing work space. Whether it being initial outlay of capital for a deposit, or uncertainty over future growth, young companies encounter a variety of stumbling blocks.
But this is not a situation unique to Shoreditch. Landlords are conservative by the nature of their business. They want companies that have strong accounts, and a proven track record of paying rent. This isn’t the ‘start-up way’.
There are flexibilities in the property market. As we noted, Shoreditch’s co-working spaces can provide work space that is low cost – the average desk will set you back around £400 per month, as opposed to £600 in The City, and £800 in the West End.
There are also a number of locations earmarked for redevelopment that can, as a result, offer flexible terms to short and medium-term tenants that represent fantastic value for money. The Shoreditch Office Space team was able to secure the year-long Village Hall pop-up space for Shoreditch Works on Hoxton Square in a deal like this.
There you have it. Office space is out there, it’s affordable and it can be negotiated on to secure terms that suit your needs. Don’t believe everything you read. Except this – this you can trust. Honestly. And if that isn’t enough to convince you, and you’re tempted by the dizzy glamour and impossibly low rents of sub-clusters, we bow down to Management Today’s Gabriella Griffith:
“We doubt you can get a flat white anywhere West of Chiswick”. Amen.
For more information on how Shoreditch Office Space can help your company secure work space in East London, or to learn about the other services we provide to our clients, please contact [email protected]