Don’t let lack of floorspace cramp Edinburgh’s style
Tech companies need the right kind of offices if they are to continue to flourish, argues Ben Reed
Dating back centuries to the establishment of The Bank of Scotland in 1695, Edinburgh boasts a long and proud financial services tradition which has consistently provided the backbone to our regional economy. We’ve seen banks rise and fall, but the story has always been of a city run on finance.
However, over the last five years, we have witnessed somewhat of a sea-change in the composition of our Capital’s corporate landscape. Our banking industry undoubtedly still plays a major role in fuelling the city economy, but there’s a new kid on the block in the form of a booming tech industry.
Edinburgh currently has one of the strongest entrepreneurial ecosystems in the world. It’s able to boast Europe’s highest number of billion dollar unicorns per capita and the UK’S highest proportion of highgrowth Ip-based firms. It’s also home to Europe’s largest tech accelerator, Codebase, and was recognised as the UK Entrepreneurial City of the Year for 2016.
Analysis of the Capital’s property market underlines the narrative of tech growth. Last year, nearly a third (30 per cent) of all office space transacted across Edinburgh in 2016 involved businesses working in technology, media or telecoms (TMT), compared with a UK average of 16 per cent. For a second year running, TMT occupiers were the most active business segment during 2016 in Edinburgh.
What’s most apparent, however, is that technology is no longer a discreet silo – it’s now an indistinguishable part of every sector. Today 44 per cent of UK tech workers are now employed at “non-tech” firms from hotels and retailers to professional services and manufacturers. The combination of financial heritage and tech innovation should provide the perfect breeding ground for the next generation of fintech firms in Edinburgh.
The tech revolution is fostering new types of occupiers, new ways of working, new kinds of workspaces and new expectations from office buildings. Businesses creating and operating tech and digital services are penetrating the UK’S regional markets, including Edinburgh, and consolidating in distinct clusters. Only a few months ago, One Lochrin Square, Edinburgh’s largest single available office building, officially opened after a major refurbishment, in part to meet unprecedented tech demand in the capital.
Edinburgh is well and truly at the vanguard of tech innovation, boasting a hotbed of young, creative talent, offering affordable living and a fantastic quality of life. As the market matures, develops and deepens, I believe Edinburgh will continue to appeal to both occupiers and employees working in tech.
The property sector has a major role to play to help firms attract and retain talent, promote collaboration and in fostering knowledge-sharing. However, most important is the availability of floorspace to meet demand.
It’s a story frequently told but Edinburgh’s constrained supply stands to hamper the future growth of tech firms.
Refurbishments can help to create modern spaces to suit modern working requirements, but we need to boost the development pipeline if we’re to truly realise the potential of Edinburgh’s booming tech sector. ● Ben Reed is Director at JLL in Scotland