Rental gap between financial and technology businesses is closing – Savills

The gap in rents paid by financial firms and technology businesses worldwide is closing, according to a set of data out yesterday that shows a surge in office prices for the digital sector since the financial crisis. 

 

Research from estate agency Savills, which monitors rents across 12 major cities, found that overall rents for the financial sector have fallen by 1.8 per cent since December 2008. 

 

In contrast, rents paid by creative firms jumped by 8.6 per cent, fuelled by rapid growth in the sector. 

 

As a result, digital and creative companies now pay $10,453 (£6,899.05) per year for each member of staff – or 47 per cent of an average hedge fund’s rent at $22,399. That compares with 42 per cent in 2008.  

 

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“The digital discount has eroded since 2008 as the industry continues to act as a disrupter due to its rapid rate of expansion,” Savills director of world research Yolande Barnes said.  

 

“In cities where there is lower demand from financial tenants such as Sydney, average rents are already higher for the digital sector, while they are very similar in Dubai and not substantially discounted in Paris,” she said.

 

In London, the gap in rents is smaller, with tech firms paying $18,296 on average per member of staff compared with $42,431 in a hedge fund. 

 

Barnes added that a new breed of “digital and creative finance” firms were taking up space in prime London areas such as Mayfair rather than traditional banking areas like the City.

 

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The UK technology sector is thriving, with firms expecting to grow four times faster than the UK’s GDP forecast of 2.6 per cent this year, according to a survey by Barclays. 

 

However, several smaller firms have warned they are being priced out of traditionally tech-focused areas such as Shoreditch after a near-doubling of rents over the past five years.