High demand for office space as tech drives employment growth in the UK’s cities

Posted by Knight Frank Newcastle on 9th December 2019 -

The firm’s inaugural ‘Future of our cities’ report reveals that TMT has dominated take-up in the first three quarters of 2019, accounting for 23% of the market.

Hotspots in 2019 for TMT in the UK’s regional cities include Leeds, Cardiff and Edinburgh, accounting for 50%, 40% and 34% of take-up in the year-to-date, respectively. This is significantly higher than in London, where TMT accounted for 21% of take-up, highlighting the growth of the sector outside of the capital. Notable deals include Sky Betting & Gaming 135,915 sq ft lease at 4 Wellington Place in Leeds and Sky’s 39,714 sq ft lease at 4 Capital Quarter in Cardiff.

Darren Mansfield, Partner in Knight Frank’s Commercial Research team, comments: “The influence of the technology sector on the economic fortunes of the UK continues to grow. Since 2002, the economic output from tech industries has grown significantly, with further upward trajectory forecast for the next ten years.

“This picture of growth is mirrored in the scale of demand for office space being acquired across the UK. The sector representation in the UK’s regional cities has grown considerably from 15% to 23% in the past four years.”

Alastair Graham-Campbell, Partner in the Capital Markets team, comments: “Growth on this scale across the UK will generate new requirements and sustain current occupational footprints throughout the next decade.

“The growth of Graphcore, a semiconductor company that develops accelerators for artificial intelligence and machine learning, is a standout example of this trend already occurring in the market. Founded in 2016, it has grown its headcount from three to 240 in just four years, and now occupies 25,000 sq ft in the Prudential buildings in Bristol.

“Significantly, the definition of the technology sector now extends beyond information, computation and internet-based media. It includes fledgling growth companies pursuing technological innovation, and is widened by the derivatives of the traditional sectors, such as professional services and banking. No longer regarded as just a back-office function, IT forms an essential part of the principle service being provided.”

Knight Frank’s inaugural ‘Future of our cities’ report looks at the key themes impacting ten of the UK’s regional office markets; Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Manchester, Newcastle and Sheffield.

For further information, please contact:

Ella Mullings, Commercial PR Manager at Knight Frank,+44 2038 970 044