The Tech X The City

Mon 20 March 2017

A new research report commissioned by the City of London Corporation and the City Property Association (CPA), Tech X The City has assessed the impact of the tech sector on the Square Mile and what it must do to attract and retain the digital businesses which will pioneer the future economy.

The Tech X The City report, produced in association with Cushman & Wakefield and KPMG, predicts that new technologies will diversify the profile of occupiers in the City. It sets out what the Square Mile must do to attract the technological pioneers that will power the digital transitions of existing corporate businesses and fill up the area’s office spaces with more diverse occupiers.

Mark Ridley, President of the CPA, said: “The City occupier base has diversified significantly over the past decade and with the right policy environment and developer investment, the Square Mile will be a natural home for global tech.”

Carolyn Dwyer, Director of the Built Environment at the City of London Corporation added: “The City is the original ‘co-working space’, a place where diverse groups have sought to congregate and collaborate for centuries. So it’s not surprising that tech and the City are quickly becoming synonymous. A new wave of technology, media and telecoms companies are attracted by the City’s world-leading connectivity, pioneering infrastructure and the unique life and authenticity of the Square Mile. By growing the City’s leisure, retail and cultural offer we can retain the working talent.”

Through interviews with landlords, corporates, start-ups and a range of interested parties, the report found a natural synergy between traditional and tech businesses. The City’s large corporates have an appetite for products and services exploiting cyber security, machine learning, artificial intelligence, blockchain, insurtech, fintech, legaltech and regtech. For business-to-business startups, the City offers a location next door to investment capital and future customers, supporting product development and sales.

Juliette Morgan, International Partner in the Global Technology Practice at Cushman & Wakefield, comments: “The City has been a centre for trade and commerce for 2,000 years, and was home to the original coffee house at Lloyd’s of London. As its indigenous industries face automation, we must collectively brace for a future which redefines activities in the City. It isn’t enough to rely on the role of co-working and flexible office spaces to bring about the strategic shift that the City needs to embrace. This report explores some of the interventions which might be made by all parties to bring about that change and identifies some of the initiatives already underway.”

Andy Pyle, UK Head of Real Estate at KPMG LLP, said: “As the City landscape changes, driven by disruptors of technology and emerging businesses, investors and corporates will need to alter their approach to their buildings. Understanding the needs of these occupiers may result in different occupier mixes, more multi-let buildings, more flexible and collaboration space, better access to public space and amenities.

“This report helps investors and corporates understand these changes.  What is clear is that the City is building from solid foundations, and can make itself even more attractive to new and fast-growing businesses.”

Tech X The City has found much that the landlords, large corporates and City government could do as part of a continual process of renewal, while maintaining the area’s unique identity:

-Encouraging co-working, alfresco or at street level, by bringing more life to underused outdoor space, opening up hidden green spaces, using lobbies as public meeting spaces and enhancing the retail offer with more independents, pop-up retail and street-food vendors.

-Establishing an accelerator – perhaps corporate sponsored, led by a not-for-profit organisation and using City of London Corporation space – to act as a focal point, and complement corporate-led incubator proposals, such as RiskForge and MDR Labs.

-Creating flexible grow-on space – perhaps in a refurbishment that makes a statement and keeps costs down. The tech sector wants flexible lease terms, the ability to scale up or down and access to the building 24/7.

-Effective marketing of value for money space offered by City rents on par with Shoreditch and Southbank – despite its perception as an expensive location.

-A role as curator for the City of London Corporation, promoting accelerators and incubators, transforming the public realm, continuing the move towards a 24/7 economy, encouraging leisure, retail and cultural uses and managing risks from terrorism and hackers.