- 3 Minute Read
- 15th September 2014
Office Space for Start-Ups: Get On the Silicon Roundabout?
The area surrounding the roundabout at Old Street in Shoreditch has gathered a reputation the past few years as the haven for tech start-ups looking for office space in central London. As its reputation has grown, some have claimed that rents are starting to rise beyond the budgets of start-ups and small technology businesses. However, others have argued that the area is as prosperous as ever for start-up tech firms, and the evidence seems to support this trend.
*Data Courtesy of Search Office Space
One theory is that the arrival of large firms in the silicon roundabout area is a catalyst for rising office space prices. But this idea is looking increasingly baseless. It seems larger tech firms are locating their corporate headquarters elsewhere. Technology giants Google, Twitter and Facebook have all chosen new developments in the Euston and Kings Cross area for their future headquarters. In fact the suggestion is that prices, in and around the silicon roundabout, are in line with price increases generally across London.
The future of tech city and its continued prevalence as a technology hub is written in several key factors. Firstly, an increase in flexible and remote working has seen many fledgling businesses make savings on desk space, this has allowed many start-ups to reach greater financial security before investing in that all important first office setup. Some would argue that this means less people are seeking office space in general, but most serviced office providers will prefer clients who have a higher chance of financial longevity.
As co-working and hot-desking hubs increase in popularity, many start-ups choose to utilise pay-as-you-go type spaces to alleviate the stresses of working from home. The rise in prevalence of co-working spaces, in combination with a higher number of start-up employees working remotely, has enabled small businesses to continue thriving in tech city. In the Shoreditch and Old street area, take up is still increasing year on year. Search Office Space has seen a 148% increase in workstation uptake in Shoreditch between 2012 and 2013, with an increase expected again for 2014. It seems the prevalence of technology start-ups in the area and the community built up around them provide a solid reason for fledgling technology companies to setup there.
However, that’s not to say that there is nothing outside of the silicon roundabout, cheaper rents are beginning to attract young businesses looking to take advantage of a compromise in location. In Croydon, a tech community has started to spring up, with fresh start-ups looking to capitalise on the lower office rates in the area. The community is pushing to attract start-up tech companies in order to turn Croydon into a viable alternative to ‘Tech City’.
‘Croydon Tech City is an organisation and community that aims to make Croydon an accommodating home for early-stage digital and technical start-ups.’ – www.croydontechcity.com
With desk rates, on average, much lower here than in the Silicon Roundabout we could see an increase in tech based start-ups taking up office in this area.
An increasing number of technology start-ups are choosing to set up outside of London altogether. With areas like the Innovation Birmingham complex, currently housing 86 technology companies in industries ranging from games to business information services. With desk prices ranging from £25 a week per person, it can be very enticing for technology businesses looking to leave the high prices of London rent in favour of Birmingham’s burgeoning start-up scene.
Cambridge has become a popular option for those escaping the rising rents of central London offices. With a flourishing start-up scene already in place, many tech companies are moving to Cambridge to take advantage of the talent emerging from the City’s prestigious university.
Manchester is also among other cities providing a haven for technology based start-ups and businesses. The company techbritain.com (started in Manchester) estimate there to be 175 tech companies and start-ups based in the Greater Manchester area, mostly situated around the newly developed Salford Quays. Making Manchester the second most important technology hub in the country.
The options are opening for young tech companies and in an industry that sometimes rewards innovation and hard work with millions, the first few years of business are all important. Though the cost of office space in tech city isn’t rising any faster than the rest of London, it is rising faster than the rest of the UK and it’s no surprise that so many tech start-ups are choosing to look further afield for their first place of work.