London’s King’s Cross has come a long way from being a dodgy neighborhood to becoming a British capital city major mixed-used residential, commercial and academic area. Yet there might be a lot more in store for this part of London and the city center in general after Google’s $1 billion investment into purchasing 2.4 acres of land to develop a million square feet of office space at King’s Cross Central.
Commercial real estate developers and local industry analysts believe this first purchase will lead to a massive move of the who’s who in the tech industry into central London. American tech giants such as Amazon, Salesforce, Microsoft, Facebook, or Twitter are actively looking for significant properties in the city center. Lesser known brands outside the US might make the move, as Yelp’s signing its first lease on a small office on Baker Street in 2012 stands to prove.
The recent powerful increase of the technology, media, and telecommunications sector, locally known as TMT, is setting a new trend in commercial land deals, as it comes hand in hand with new kinds of mixed-use office space, and consequently could lead to quite a win for the real estate and financial sector in London if big tech companies expand to and invest in the United Kingdom and continental Europe.
Google’s development will be completed in 2016 and the million-square-foot office will welcome several thousand employees and will be twice as big than the Googleplex, Google’s US headquarters in Mountain View, California. As the search giant put it, this deal made it “one of the biggest ever commercial acquisitions in the UK.”
While London’s historic position as a financial and commercial hub, means office buildings and high rises are not hard to be found, the existing type of buildings do not cater to the “hipster ” tech companies and startups which look for fun and eco-friendly traits in building designs.
“[A built-in] Whole Foods is the dream for all these guys,” Hannah Fearnley, a national director at commercial real estate firm Jones Lang LaSalle, told Ars. As it happens, the high-end American grocery chain has opened its first European store in Londong back in 2007 and has added a second one in 2012.
London’s tech heart is currently located around the Silicon Roundabout, the home of most startups that’s about 2 miles away from King’s Cross. Yet most companies here are rather small, such as Last.fm or Dopplr, the one high-tech corporate ancho being the satellite communications firm Inmarsat. With the UK government calling it “Tech City” and investing £50 million, or $78 million, as announced in December 2012, this cheap avenue for startups might become a the home of big players of the tech world.
According to Jones Lang LaSalle insight into London’s commercial real estate world, Amazon is looking for 300,000 to 600,000 square feet of new space by 2016 to consolidate the offices it already has in the Londong area, while Microsoft plans to open another 150,000 square foot office by 2014, and Sony wants another 60,000 to 250,000 square feet by 2015. But high rollers are not the only ones developers and realtors are targeting, as smaller London-based startups, including Firebox, PeerIndex, and FundApps also fit the bill.
If all these tech companies do move into London’s central area, the British capital stands to become a thriving tech heart of the Old Continent, boosting financial growth for the city.