To survey the skyline of Silicon Roundabout is to embrace a varied and growing expanse of building types. One should be under no illusion that the cranes will be descending upon the area in the near future as Landlords, inspired by their respective architects, set to work with rigour in transforming ‘redundant’ building stock. Sickening to some but illuminating and a glimpse of something better to others.
However the ‘noise’ from twitter and other media channels is growing daily as both existing occupiers and fast growing businesses are showing anything but systemic indifference to rising rental values allied to limited office supply.
It is becoming increasingly frustrating reading about a multitude of businesses who are being ‘forced’ out of Clerkenwell, Shoreditch, Farringdon etc due to the fascinating revival of an area dominated by the ever growing tech based ‘ecosystem’.
This Christmas tale should not be derided with howls of laughter but in the nicest way it is worth remembering the title of the inspirational TED Talk by Ernesto Sirolli ‘Want to help someone? Shut up and listen!’
Increasingly new clients who want to remain in Silicon Roundabout are telling us it is not possible to find desirable offices that will not be at rental levels that lead backers to question whether vital funds and cashflow are being squandered.
We are listening to them but insist it is simply wrong to assume that it is time to relocate to Paddington, Notting Hill, Southwark or indeed the extreme City fringes of London because it is impossible to find offices at below £35 to £40 per square foot!
In Monocle magazine this month Steve Bloomfield writes an article ‘Rein in the rancour’. He says “As amusing as it may be to mock MP’s and senators there must be some middle ground between deference and derision. It’s not because they all necessarily deserve to be treated with respect – some clearly don’t…we risk undermining democracy itself if we continue to dismiss all politicians as in someway dishonest, selfish or useless.”
Now if we delete references to MP’s, senators and politicians’ and replace them with ‘landlord(s)’ my point is that the area collectively known as Silicon Roundabout ‘enjoys’ ownership of buildings by a multitude of differing Landlords each with very different agenda’s, attributes and rental aspirations.This does not make them ‘dishonest,selfish or useless’!
To an extent they fall, some might argue, into three catagories.
In an example where three buildings in fairly close proximity are specified to a very similar standard (brick faced walls, woodstrip flooring and industrial style lighting) we might come across Landlord(No 1) who may have multiple buildings and is under no pressure whatsoever, financial or otherwise to negotiate a rental below £35/£40 per square foot. He/She will often wait for the right tenant and offer them minimal incentives. Landlord(No 2) may only own one or two buildings has borrowed heavily to purchase the freehold and in a tough economic climate and faced with a bank looking at refinancing a loan will take a softer line on rent, perhaps £32.50 per square foot. Landlord(No 3) is actually a tenant. Signed up to a five year Lease but with a business in financial trouble, they want out, and a subletting or assignment at an exceptionally competitive rate might just mean the difference between survival and failure! Could it be a deal at £27.50 per square foot?
The numbers are purely illustrative and resident Landlords may absolutely not fall in to these catagories when setting their rental levels. However, the inference is clear. The office market in the area is showing a wildly disparate rental profile dependant on many factors.
There are ‘deals to be done’ that does not mean it is time to shut the door and leave the area!
Michael Kushner is editor of www.siliconroundabout.org.uk and Managing Director of Kushner, who are experts in the acquisition of offices for tenants. To find out more about available office space visit our office page.