Over the past few years, businesses in the technology, media and telecoms (TMT) sector have been the engine drivers of take-up in most office markets outside London and the South East. In this extraordinary year full of change, it's one thing that remained the same: TMT continued to dominate take-up in the first six months of 2020, accounting for 31 per cent of total take-up in the regions, significantly above the preceding five-year average figure of 18 per cent.
You might assume that technology companies have been largely unaffected by the Covid-19 pandemic and therefore their dominance is due to other sectors being less active in the market more than the strength of TMT occupiers themselves, but you would be mistaken. The UK’s technology sector has been innovating and growing for many years, driven by TMT start-ups which are often based in regional cities rather than London where rent is cheaper and they can cluster close to similar innovators, plugging into an ecosystem of young talent and knowledge.
While the TMT sector isn’t immune to the economic disruption from Covid-19, most companies in this space have not seen the wholesale disruption visited on some by the pandemic, such as the travel industry for instance. Indeed, the TMT sector may actually see some benefits as other sectors look to increase their online and tech presence in response to Covid-19. Companies associated with e-commerce, healthcare, gaming and cloud computing could all grow the next few years as social distancing restrictions redefine how we spend our time.
Trends in venture capital investment, which can often indicate future demand for office space as when companies receive significant funding they often use this investment to increase their headcount, point to significant further growth by the TMT sector across the UK.
Ultimately, the UK tech sector will remain strong and will play a vital role in helping put the country’s economy back on track following the pandemic and in all likelihood for many years beyond. With the regional office market presenting a good environment for both start-ups and established firms looking to grow, they will continue to play a significant part in the TMT sector’s success for the foreseeable future.
Further information
Spotlight: UK Regional Office Market Report
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