Rents ahead of Mid-Market, San Francisco and Brooklyn, New York
Shoreditch is 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, according to new research from Knight Frank.
The 2018 Global Cities report analyses the cost of office space in the tech and creative districts of the world’s leading cities. It identifies Shoreditch as the world’s most expensive tech district, where rents have reached $90.75 per sq ft, which are 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.
James Nicholson a Partner, Knight Frank Tech said: “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. Creating great ‘user experience’ is paramount for those looking to attract and retain the best talent. This direct association between workplace and talent has forced businesses to prioritise working environment over and above a general desire to keeping costs low.”
James Roberts, Chief Economist at Knight Frank said: “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.
“Support for London’s thriving tech industry should be higher on the government’s list of priorities.”