Just an FYI but our West End Offices Sub-Markets Research report for Q2 is available on our website here and it covers the West End, Mayfair, St James’s, Marylebone, Noho, Soho and Covent Garden sub-markets but this month we’re talking tech investment and the big boys who have taken vast amounts of space in London over the past few years.
Record Investment (And A Weak Pound)
In the first two and a bit quarters of 2018, foreign investment in UK tech firms hit a record-high $6.7bn (£5.5bn) according to the latest numbers from the government’s Digital Economy Council.
Two interesting sub-facts emerge from the newly-released figures – first, $6.7bn surpasses the number for the whole of 2018* and second, the UK has now overtaken the USA for investment per capita.*
*Source: Sky News
In a textbook good news/bad news scenario, the record investment suggests that foreign investors are confident in the UK’s burgeoning tech sector but it also suggests that the Brexit uncertainty has weakened the pound enough to make the UK a more attractive destination – more bang for your buck.
The Facts
Since 2013, the UK tech sector has received twice as much funding as Germany’s and six times as much as France’s and jumping on the numbers, secretary of state for Digital, Culture, Media & Sport Nicky Morgan said ‘These fantastic figures show the confidence overseas investors have in UK tech with investment flows from the US and Asia at an all-time high.
We have a longstanding reputation for innovation and the statistics endorse our reputation as one of the best places in the world to start and grow a digital business.’
The biggest drivers of this year’s increase were renewable energy company Ovo Energy who secured a £200 million investment from Japan’s Mitsubishi Corporation who took a 20% minority stake, valuing them at a unicorn billion and Deliveroo who secured investment from Amazon.
Neither party would reveal the size of the investment but Amazon said they were leading the $575m (£450m) round which also included investment from T. Rowe Price, Fidelity Management & Research Company and Greenoaks.
Interestingly, Amazon’s investment comes off the back of the retail behemoth pulling back their own restaurant delivery operation in the UK in the face of competition from Deliveroo themselves, Just Eat and Uber Eats so perhaps they’re hedging that Deliveroo will become the VHS to Just Eat and Uber Eats’ Betamax, the food lover’s Mozart to the bitter-tasting Salieri.
Where Are They All Going?
‘Move over Silicon Roundabout’ says wired.com’s Will Bedingfield, ‘London’s new tech destination is King’s Cross.’
The massive redevelopment of King’s Cross has attracted some of the world’s biggest tech firms including Google who are building their new ‘landscraper’ London HQ. Designed by Bjarke Ingel Group and Heatherwick Studio, will be longer than The Shard is tall at 312 metres, and will be equipped with a wellness centre, plenty of bike parking and a roof garden planted with gooseberry and sage. Naturally.
Not to be outdone, Facebook’s 2018 deal is for 613,500 square feet across three sites and there’s more. Much more. Both the world’s biggest tech players and the pretenders to the throne have set up shop in King’s Cross, turning it from a legacy dive into one of the city’s most influential and desirable areas with average rents* for Grade A space hovering around the £80 per square foot mark.
Here are some of the companies and organisations making a mark in King’s Cross, literally and metaphorically…
Pavegen – founded in 2009, they convert footsteps into energy. Tread on their specially-designed slabs and you convert that energy into small amounts of electrical power. They hope their smart flooring will be able to power street lighting.
Expedia Group – Owners of Trivago, hotels.com and CheapTickets amongst others, they have set up their London HQ in King’s Cross.
Balderton Capital – the VC responsible in part for LoveFilm and Kobalt Music Group.
The British Library – the UK’s national library, home to somewhere between 170 and 200 million items.
The Francis Crick Institute – The largest biomedical research institute in Europe home to over 1,500 scientists and staff.
The Alan Turing Institute – The national institute for data science and AI.
Universal Music – Moved to King’s Cross from Kensington in 2018.
DeepMind – Alphabet-owned AI company. It plans to move into its new 11-storey headquarters in 2020. In the words of Demis Hassabis, CEO and co-founder, the building is designed ‘to help foster energy, contemplation and collaboration – ingredients required for pioneering scientific research.’
Dazzle – The travel tech start-up has developed a social messaging platform for rail, bus, metro and airlines. It enables passengers to plan, book and manage digital tickets via voice and text channels while adding on additions like parking, coffees, hotels and entertainment.
Samsung KX LDN – Samsung announced its 20,500 square feet showcase space last year. Situated in Coal Drops Yard, they will host large events and consumer care services in the space.
Toyota Connected – The European start-up office for connected mobility services. Toyota Connected uses data science and predictive intelligence to improve mobility around Europe.
To read the full story about the regeneration project that has breathed new life into a neglected area, click here.
Who’s next? Watch this space.
Talking of space, if you have a property enquiry we can help you with, contact us today on 020 7629 1088 or info@bdgsp.co.uk.