Real estate

Tech groups pose challenge to landlords

incubator business space

London's booming tech and creative economy is changing the way people in the capital work – which poses a challenge for the biggest office landlords. Tech, media and the creative industries have become the fastest-growing sectors in the past five years, but there's increasing evidence that such companies do not want to occupy the high-rise towers that dominate the City and Docklands. They also find it hard to commit to the 15 to 20-year leases that are usual in the property industry. Instead they've turned to landlords offering flexible office space in former warehouses, factories and industrial buildings in cheaper locations such as the South Bank, Farringdon and to the east of the City. Hubble, for example, runs a marketplace matching businesses seeking small amounts of space on short-term flexible contracts with companies who have spare space to sublet. Its founder Tushar Agarwal says he was inspired to launch the company after seeing how hard his friends found it to secure space for their start-ups. 'Start-ups are very bad potential occupiers for traditional landlords,' he explained. 'Business life cycles are getting shorter, so it becomes harder for companies to commit to long leases.'

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