Tech companies change European office landscape

As the consultancy points out, mirroring its bourgeoning demand for warehouse space, e-commerce particularly is now emerging as a force in European office markets, as highlighted by the recent Amazon and Zalando lettings. Last year Amazon took 6,800 sqm in Berlin, a 40,000 sqm pre-let plus nearly 29,000 sqm of existing space in London, and 6,500 smq in Dublin. Meanwhile, other US tech giants have continued to consolidate their European presence: Google took 33,000 sqm in King’s Cross London on a short-term lease prior to full occupation of its new 92,000 sqm HQ in 2019. Facebook leased 11,600 sqm in Dublin, taking its local footprint to some 22,000 sqm. Beyond the core markets, Google also recently announced the opening of a new Google Campus in Warsaw, which will add to the existing franchises in London and Tel Aviv.

“At a micro level, it is expected that the tech sector’s locational choices will be increasingly shaped by the tension between the centripetal forces of talent attraction and retention and the centrifugal forces stemming from rising office rents and housing costs in amenity-dense central areas. These tensions are likely to be more acute in cities most severely impacted by the lack of development and this point in cycle, and where suitable property options have reduced more sharply as a result,” Colliers says. “In the future we could see a shift by landlords towards hybrid roles between traditional ownership and real estate services provider, or to situations involving equity participation in tech businesses in return of office space,” the company adds.