London's King's Cross receives boost to TMT credentials
Web-giants Amazon, Twitter and Yelp have revealed plans to develop offices in London’s King’s Cross following Google’s $1bn purchase of 2.4 acres of space within the immediate vicinity of the station.
The area adjoining the international terminus – once an industrial rail yard site – has been earmarked for extensive redevelopment into a centre for high-end office, residential, retail and academic schemes.
Google’s plans to transform 1m sq ft of office space at King’s Cross Central came as a surprise to many observers, including senior director of DTZ, Richard Howard, who declared: “[10 years ago], you would not leave a dog tied to a lamppost [in King’s Cross].”
Howard, whose firm was responsible for brokering the original Google deal, has seen significant interest in the area since the announcement, commenting: “The phone's been ringing for a while now.”
Such a bold statement of intent from the global web services provider has led major TMT companies to register interest in moving resources to the area.
In east London, the un-bridled success of Old Street’s ‘Silicone Roundabout’ has instigated a dramatic rise in property prices as a result of a string of government initiatives, leading TMT companies who have not already secured space to look further afield for the most competitive rates.
American technology companies, such as Amazon, Salesforce, Microsoft, Facebook, Twitter and Yelp, have all begun to scour the city centre for opportunities to open satellite offices outside their US headquarters.
A report released recently by global real estate firm Jones Lang LaSalle, suggests that online retailer Amazon will require 300,000 to 600,000 sq ft of new space before the close of 2016, in order to consolidate all their existing UK offices into a single location.
Microsoft have expressed their desire to open an 150,000 sq ft office by 2014, whilst Sony are searching for 60,000–250,000 sq ft of space by 2015 and advertising giants – such as Havas and Omnicom – are looking for approximately 100,000 sq ft each in time for the close of 2015.
One unexpected effect of such interest has been the rise in construction of mixed-use office space, which has led industry insiders to speculate on the increasingly permanent role of TMT industries in commercial real estate markets. According to Howard, “35% of all [commercial real estate] demand in central London is TMT.”
Until recently, the area surrounding ‘Silicone Roundabout’ – only 1.6 miles from King’s Cross – has been dominated by smaller tech companies and start-ups such as Last.fm, Moo, Dopplr and anchor tenant Inmarsat.
As of December 2012, a series of initiatives in what the government has coined ‘Tech City’, has seen £50m pledged in redevelopment funds, leading current residents to decry increasing rents and a breakdown in the co-working eco-system that had been allowed to grow organically since the advent of e-commerce.
Flagship co-working spaces including TechHub, the Tea Building and Zetland House have all seen indicators that their 1970s landscape is under threat from proposed projects from online industry leaders, with little care for the fate of what has been a mainstay of the local economy since the mid-1990s.
Milo Yiannopoulos, editor-in-chief of UK-based technology magazine The Kernel, said: “The Government can’t control and doesn’t know how to communicate with companies that are succeeding… But, for the other 95%, the quangocrats are swooping in and taking ownership. And we know where this story ends: ballooning numbers, mediocrity, failure, and colossal expense.
“What was previously grumbling from the fringes about the government wading in and interfering in the sector, claiming credit not due to it and trying to take over what is happening in spite of and not because of [the government’s] presence in east London is now represented in a generational flow of wealth through public sector VC firms and, now, urban regeneration: the latest, most expensive, and most manipulative kind of engineering the government has yet applied to the area.”
Image courtesy of <a href="https://commons.wikimedia.org/wiki/User:Mattbuck">Matt Buck</a>