Having become the darling of leasing agents in recent years, technology companies around the world could now lead the way in rethinking what a modern office should be.
“Tech has always been the industry that has led the definition of great office space,” said Nicky Wightman, Savills’ head of emerging trends, on a webinar marking the agency’s latest Tech Cities report.
“There’s the sense of an ecosystem as well – we think of tech, we think of physical space and clusters. The next stage of this is that we may see some redefinition of what great space looks like, a re-evaluation of what space is for.”
Tech tenants have been big business for landlords in recent years. Since the outbreak of Covid-19 there have still been some large transactions, such as Facebook’s lease on all 730,000 sq ft of New York’s Farley Building (pictured). But the pandemic has raised questions about whether that trend will continue, particularly given the prevalence of homeworking at some tech giants.
“Across all our cities, tech companies have been prolific in taking new office space in recent years, in many instances overtaking financial services to become the single biggest occupier group,” said Paul Tostevin, Savills’ head of world research.
“[But] while some big deals are happening, others are being put on hold or space is being shed as occupiers in the tech space re-evaluate their needs. Tech occupiers have really embraced homeworking in the near term and that has also been contributing to rising levels of subleased space.”
Nonetheless, Tostevin predicts that “flagship tech HQs” such as Amazon’s Seattle base will “undoubtedly remain important”.
“Big tech companies have invested very heavily in their urban headquarters to attract the best staff,” he added. “These are places to instil company value, for staff to come together and collaborate, to attract the best talent, and are even testbeds for the very technologies that these companies are producing.”
As part of Savills’ latest report, the agency identified 12 “tech lifestyle cities” that it said are significant not only as venture capital hotspots but also because factors such as their air quality and green spaces will meet occupiers’ requirements around wellbeing.
The European cities to make that list are Amsterdam, Barcelona, Berlin, Copenhagen, Dublin and Stockholm. Those are joined by Austin, Boston, Denver and Seattle in the US, as well as Tel Aviv and Melbourne.