What's Hot in Commercial Property Investment: The Digital Tech Industry

Feb 28 2018

Darren Best

Prime Minister, Theresa May: “Today, more than 1.5 million people are already working within the digital sector, or in digital tech roles across other sectors, while the number of digital tech jobs across the UK has grown at more than twice the rate of non-digital tech sectors.From analysis to web developers to software architects, these pioneers of our digital economy are at the forefront of a great British success story.” After all, what qualities make a digital tech economy successful? Capital and talent, yes, but also accelerators, affordable co-working spaces and experienced mentors. The face-to-face networking that these enable is hugely important to the growth and success of digital business. Image credit: Billion Photos/Shutterstock

What’s Happening in Digital Tech Investment?

The shape of digital tech investment in the UK is changing. In 2016, two-thirds (more than £4.6 billion) of such investment was recorded outside of the capital. That is more than 50% higher than investment outside of London in 2015. In fact, top destinations for digital tech investment (outside of London) in 2016 were:
  1. Edinburgh, £159 million
  2. Cambridge, £153 million
  3. Bristol and Bath, £109 million
  4. Oxford, £106 million
  5. Manchester, £78 million
  6. Sheffield, £61 million
But this doesn’t mean we should forget about London. London’s emergence as a world leader in digital tech has been phenomenal over the past few years and continues as a viable location, with a reputation for digital tech innovation and excellence that is unparalleled. In fact, more than a third of Europe’s tech unicorns ($1 billion valued businesses) are based in the capital. In 2016, Blippar, the augmented reality company, joined the ranks, alongside TransferWise, Shazam, Rightmove, Funding Circle and many more.

The Digital Jobs Leading Investment:

Between 2011 and 2015, the number of digital tech jobs across the UK grew by 17%. That is more than twice the 8% growth seen in non-digital sectors. On the surface, it appears that 3% of all UK employees are in the digital tech sector. However, when we consider those who work in digital tech roles within other sectors, the figure rises to 6% (a total of 1.64 million jobs.) This represents an overall increase of 85,000 digital tech jobs during 2015 alone. The growth in digital tech jobs can be seen most notably in London (95%) with e-Commerce (27%), Mobile (22%) and FinTech (13%) sectors among the most popular for investment. Elsewhere in the UK, Dundee (67%), Redruth and Truro (61%), Sunderland (49%) and Edinburgh (46%) have seen great growth in digital roles. Meanwhile, down in the South, high levels have been recorded in Brighton (36%), Southampton (34%), Plymouth (33%) and Bournemouth and Poole (30%.) Image credit: Indeed, the geographic concentration of digital tech businesses is telling. Businesses of this type tend to group together, to facilitate networking, meetup and client potential to the fullest, pooling resources and requirements. A concentration of digital tech businesses is therefore good for a local economy, providing a concentrated collection of highly skilled and higher paid employment and higher levels of GVA. It is within these burgeoning tech talent locations, flourishing with tech roles and talent, where commercial property interest is highest and most profitable.  Darren Best, managing director of Savoy Stewart, comments:
“The evidence rings true: commercial property specialists must take an opportunity to connect investment, job growth and meetup potential in the digital tech sector, with an increase in their own market share, profit margins and efficiency in 2018. The potential is limitless!”
Feature Image credit: ImageFlow/Shutterstock

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