2012年12月11日星期二
Tech Firms Outrent Banks; a Funky Feel
By PETER EVANS
Technology firms are now leasing office space in Europe at a faster pace than financial services companies, according to a new research report, underscoring their importance to the region's property market.
Derwent London
Property developer Derwent London's white-collar factory concept aims to appeal to technology firms.
But the tendency for technology businesses to cluster in fashionable, but relatively low-rent parts of cities and reject traditional corporate office space is a double-edged sword. Many landlords welcome the increased demand for space, but aren't happy about having to adapt to technology companies' different priorities. Those preferences could put more pressure on rents in prime sites, where the pace of increases has slowed from last year.
In the first half of 2012, technology and telecoms companies in major European cities leased 520,000 square meters, according to analysts at CBRE Group Inc. CBG +1.14% That exceeded for the first time the volume of leasing by banking and finance firms, which took 420,000 square meters, CBRE said.
Growth in the technology sector has been fuelled by government grants as well as increased pressure on banks to lend to start-up firms, resulting in a proliferation of start-up firms on the hunt for office space. On top of that, established tech companies are moving into larger premises or establishing themselves in new cities across Europe as demand for tech services continues to grow. The increasing demand for office space is forcing developers to adapt their portfolios to meet the often-diverse demands of technology companies.
"Tech firms are interested in finding an expression in the buildings they go to," said Ben Munn, head of workplace strategies at CBRE. "This can be very basic, but the important thing is that it doesn't feel corporate. It's unacceptable if you end up looking like you're sitting in a professional services company."
Unlike financial-services companies, technology and telecom firms are less concerned with amenities or with high levels of building security. Instead they prefer "creative" spaces and interesting buildings, Mr. Munn added. One example: A former multi-story parking garage in central Paris, complete with ramps once used by cars, now provides a home to computer-animation production company, Illumination Entertainment.
Funky office space and locations are important to technology companies because they are so reliant on attracting and retaining top talent.
"You basically want your staff to own the culture and develop it," said Tom Adeyoola, founder and chief executive of Metail, a virtual fitting-room service based in Shoreditch, a neighborhood in the eastern part of London. "The office you work in is a way of achieving that."
But in other neighborhoods, some employers are focusing more on cutting people than attracting them. In the financial-services industry, banks have cut back on staff and delay planned office moves.
UBS AG recently said it would axe 10,000 jobs world-wide as it refocused its operations away from investment banking, while Deutsche Bank AG DBK.XE -0.67% and Nomura Co. 9716.TO -0.61% Ltd. have reduced staffing levels across Europe. Last year, wealth manager Schroders SDR.LN +0.55% PLC shelved a proposed move into 250,000 square feet of offices in central London, citing the global financial crisis.
Growth in prime rents—the top rents paid for the best locations in large cities—has slowed in the first three quarters of 2012, after a steady rise in rents last year, according to property agent Jones Lang LaSalle JLL +1.66% . That indicates demand from the financial-services companies that typically occupy such space has yet to recover.
By contrast, technology firms such as antivirus software firm Kaspersky Lab ZAO, Groupon Inc., GRPN +3.76% Google Inc. GOOG +1.67% and email provider Mail.ru Group MAIL.LN +1.07% have moved into new, larger office space in the last 18 months. Cities benefitting from this trend include London and Dublin, where nearly a quarter of all new space now goes to technology, media and telecom companies.
Thanks to the strong economy in Germany, Berlin, Munich and Hamburg also are popular. Google and Groupon both opened offices in Berlin in the last 18 months. In Eastern Europe, Moscow has seen increased leasing activity, notably from Kaspersky Lab and Mail.ru.
But most technology companies don't want to splurge. Google, which last year opened a new U.K. headquarters in London's West End, pays around £55 (around $88) per square foot, 50% below average rents for prime space in central London because the office isn't on the main thoroughfare.
Property developer Derwent London DLN.LN +0.05% has designed an office concept targeted at technology firms. Known as the white collar factory, the office has higher ceilings, more-open floor plans and, unlike traditional offices, windows that can be opened.
"Pure technology firms, as opposed to telecoms and media firms, don't want to pay much rent," said Celine Thompson, head of leasing at Derwent London, which specializes in offices on the periphery of London's traditional prime real-estate areas, the West End and City, as the historic financial district is called. "But there is certainly upward pressure on these [submarket] rents on the back of increased demand."
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