Internet companies snap up new offices in West End
DOT-COM companies have been snapping up glitzy new offices in the West End of London at a rate not seen since the 2000 boom.
According to new research from Cushman & Wakefield Healey & Baker, the commercial property consultant, dot-com companies have signed up for 217,655 square feet of West End office space so far this year, a fivefold increase on the 42,000 sq ft leased during 2002 and just shy of the estimated 240,000 sq ft leased during the 2000 dot-com boom.
The amount of space leased by dot-coms in 2001 plunged to just 15,000 sq ft, according to Cushman.
Google, Yahoo and Lastminute.com are among the big name dot-coms that have signed up for vast new offices in the West End. Google rents about 73,000 sq ft of office space at Belgrave House, a huge speculative office development built by Grosvenor, the Duke of Westminster’s property company.
David Hume, partner in the West End office team at Cushman & Wakefield, said: “As dot-com companies have matured, landlords have started to consider them more seriously as tenants. In the past many landlords were worried about leasing space to dot-com groups because of their flimsy finances, but today many companies are making real money and are growing, successful businesses.”
Mr Hume said that today’s dot-com companies were also seeking more “corporate”, “grown-up” space than during the dot-com boom, when many signed up for offices replete with space for table football tables, basketball hoops and other play areas.
“In the past dot-com companies usually signed up for fairly low specification office space in fringe areas of the City and Soho. Today they are willing to pay much higher prices for high-quality office space with suspended ceilings and raised floors in the heart of the West End,” Mr Hume said.
Peter Damesick, head of research at CB Richard Ellis added: “Today it is the survivors and success stories from the dot-com boom who are coming through now and taking the space. It is a more solid picture of demand from expanding companies in the Internet-related sector than the fire flies who burnt brightly and disappeared in the dot com boom”.
At the end of November, 3.4 million sq ft of office space had been leased in the West End and a further 1.2 million sq ft under offer, according to CB Richard Ellis.
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