Knight Frank: Tech sector is driving Edinburgh’s boom
Employment in Edinburgh’s burgeoning technology sector is set to outgrow the UK average over the next ten years, according to new research released by Knight Frank.
The independent property consultancy’s inaugural Future Of Our Cities report found that the number of jobs in the TMT (technology, media, and telecommunications) in Edinburgh is expected to increase by 21% over the next decade, ahead of the UK cities average of 16%.
Knight Frank’s analysis also found that TMT companies accounted for more than one-third (34%) of office take-up in the Scottish capital in the first three quarters of 2019 – outperforming the UK cities average of 23% and 21% in London.
Edinburgh has the highest retention rate for graduates, compared to other major UK cities outside of London at 47%, while the overall population is growing by 13% - nearly double the average of 7%.
With a graduate population of nearly 50,000 and 57% of workers considered skilled, Knight Frank said that Edinburgh was proving the ideal base for growing technology companies.
Simon Capaldi, office agency partner at Knight Frank Edinburgh, said: “The tech sector has been growing exponentially in Edinburgh, creating a vibrant ecosystem of businesses. Between the long-established CodeBase, the recent arrival of WeWork, and some of the best academic institutions in the UK, we have a solid base on which companies can set up and grow.
“That, of course, has consequences for landlords in the city. These types of occupiers are looking for something different: not only do they want space that reflects their brand identity, they also require more flexible lease terms that allow them to grow – or even contract – through the process of becoming established.
“As the occupier pool evolves in Edinburgh, the property world will need to change with it. We also expect to see more co-working space coming into the city, which remains relatively undersupplied compared to other major cities in the UK.”
Darren Mansfield, partner in Knight Frank’s Commercial Research team, added: “The influence of the technology sector on the economic fortunes of the UK continues to grow. Since 2002, the economic output from tech industries has grown significantly, with further upward trajectory forecast for the next ten years.
“This picture of growth is mirrored in the scale of demand for office space being acquired across the UK. The sector representation in the UK’s regional cities has grown considerably from 15% to 23% in the past four years.”
Knight Frank’s inaugural Future of our cities report looks at the key themes impacting ten of the UK’s office markets outside of London; Aberdeen, Birmingham, Bristol, Cardiff, Edinburgh, Glasgow, Leeds, Manchester, Newcastle and Sheffield.