Founded on the Isle of Man in 1993, PDMS also opened an office in London in 2007.
Having acquired our own headquarters in the Isle of Man Business Park in 2009, we are now also looking to expand our London office, and have been seeking larger office premises in the capital. Currently based in Fitzrovia, we came across research carried out by property experts Knight Frank into technology companies and the commercial property market in London, which makes for interesting reading.
According to the research, the technology industry has proved resilient in the face of tough economic conditions, and this is no more evident than in the increasing uptake of office space in Central London. Slack left in the commercial property market in Central London by the decline of the financial services sector, is increasingly being picked up by Britain's technology and telecoms industry (which according to the London Stock Exchange is now worth more, as a whole, than it was in 2007). Whilst many of these companies are 'foreign', it is Britain, or more specifically, the capital, where they are choosing to locate their offices.
The increased demand for office space coming from tech companies (tech firms acquired 1.3 million sq. ft. of office space in 2011, compared with 640,000 sq. ft. in the previous year), contrasts greatly with falliing demand across the market as a whole, an, demonstrates the growing significance of the tech industry as a proportion of the UK economy. James Roberts, head of commercial research at Knight Frank said 'if office demand from tech firms doubles during an economic slowdown, it will be interesting to see what happens when growth improves."
John Snow, head of central London offices, explained, "That companies, like Apple, Google, and Facebook want to be in London over other European cities is a great vote of confidence in the capital. This is a time of huge change for London, with foreign influence growing [in both the leasing and investment market]….London is a business-friendly environment, which is the lure for overseas companies and investors. I expect this globalisation of London to continue."
It isn't just London's 'Silicon Roundabout' (the Old Street roundabout area) which is witnessing an influx of bespectacled techies; there were almost as many technology sector property deals struck in W1 last year as there were in EC1, although East London remains a booming tech area. Aside from the Silicon Roundabout, 'tech clusters' have sprung up in Clerkenwell, Covent Garden, Fitzrovia and the South Bank. This move away from the tech industry's former hub of East London towards the capital's premium property locations, repeats the trend of the early naughties, when native technology companies made the leap from the Thames Valley to the capital.
Established tech firms are also moving into more 'traditional' areas of the city, proving that requirements and desirability outweigh location. Google has taken over 150,000 sq. ft. of space in the Central St Giles complex (to the east of Oxford Street), and Spanish telecommunications giant Telefónica has recently moved into a 50,000sq ft. property in Regent's Street. Matthew Key, chief executive of Telefónica Digital, said, "London is undoubtedly at the forefront of the current digital revolution and was a natural choice for us to establish our new headquarters in. [It] is arguably the biggest hub for technology startups outside Silicon Valley and a global centre for the media and advertising industries. It attracts the best talent and, for an international business such as ours, acts as a unique bridge between Europe and the Americas."
The decision behind relocating tech businesses to London, goes beyond the geographical advantages of sitting astride the American and European markets. London's workforce is also exceptional. It is Europe's most culturally diverse city, and 45% of the population is aged between 20-44. This makes London a very attractive proposition when you consider that the average employee age at Google is 31, and at Facebook it's just 26. Nokia recently relocated their headquarters to London from Farnborough despite it being only 30 minutes by train from Central London, citing an inability to attract quality staff.
One high profile tech firm which has bucked the trend is Twitter, choosing to opt for Dublin, (despite encouragement from David Cameron and Boris Johnson), in part due to Ireland's lower rate of corporation tax. It should be noted, however, that their advertising offices are based in London's West End.
We have all long-known that the technology and engineering sectors are likely to be the most robust during tough economic times, but what is most surprising about this research is just how rapid the rise of the technology industry has been in the UK.
At PDMS, we are firmly committed to our Isle of Man headquarters and are currently recruiting for a number of new positions to help expand our team on the Island. Our London office, however, provides a vital connection to UK and global markets, as well as access to ideas and talent which complement the many benefits we enjoy on the Isle of Man.