Tech firms sign for 400,000 sq ft of London office space in a month
AI firms have signed for nearly 400,000 sq ft of London office space in under a month, in the biggest rush of tech leasing the capital has seen in a generation.
Anthropic confirmed this week it has taken 158,000 sq ft at One Triton Square near Euston in a deal with British Land and Royal London Asset Management, with capacity for up to 800 people.
The Claude-owner currently employs over 200 staff in its London offices, and is offering engineer salaries reaching £630,000 a year.
The handshake lands just days after OpenAI signed for 88,500 sq ft in King’s Cross – its first permanent UK office – and weeks after Databricks quadrupled its London footprint with a 137,000 sq ft headquarters in Fitzrovia, part of an $850m UK investment pledge.
Mike Wiseman, British Land’s head of campuses, said the company was “overwhelmed with new demand for AI-related businesses growing in London”.
Vacancy hits record lows
The leasing spree is hitting a market already under severe supply pressure, with prime office vacancy in both the City and the West end falling below one per cent, against a long-term average of seven to eight per cent.
Meanwhile, prime City rents are up 46 per cent since 2020, with West End rents rising 68 per cent over six years, according to Knight Frank.
CBRE executive director Chris Vydra said AI firms were coming to London over any other European hub. “Not Berlin or Paris”, he said, “they come to London first”.
He added that funding levels behind today’s AI companies “are so well funded… billions more than what we saw in the dotcom era”.
Developer Helical on Wednesday received planning permission for a new 55,000 sq ft office in Farringdon, in partnership with Places for London, directly citing the resurgence in tech occupier demand.
All three major AI firms have concentrated in the same north London corridor, brushing shoulders with existing tenants Google Deepmind, Meta, Synthesia and Wayve.
Speed of expansion alarms and excites landlords
Agents have argued that AI companies are expanding their London footprint far quicker than any previous wave of tech occupiers.
Firms typically begin in flexible co-working spaces before moving into more conventional offices of 20,000 to 30,000 sq ft within just 18 to 24 months.
“Almost before we’ve signed the licence, they’re saying they could be 50 to 100 people by next year”, said Mike Gedye, CBRE’s head of tech, media, and telecoms.
Landsec reported its flexible workspace at King’s Cross had signed over ten AI and tech firms in under six months.
Mike Prew, managing director at Jefferies, warned that AI-driven job losses could trigger a repeat of the post-dotcom office slump, when rents dropped 30 per cent and millions of square feet were vacated.
Deutsche Bank analysts have flagged automation and white-collar roles as rising risks for property investors.
But landlords have pushed back on the pessimism. “Tech advances like this haven’t killed white-collar jobs before”, said Nick Montgomery from Schroders.