The gap between rents paid worldwide by tech businesses is closing with those paid by the finance sector, according to Savills' latest 12 cities report released at Expo Real.
The gap between rents paid worldwide by tech businesses is closing with those paid by the finance sector, according to Savills' latest 12 cities report released at Expo Real.
The report finds that average shifts in the world city rents monitored indicates overall financial rents have fallen by -1.8% whilst creative sector rents have risen by 8.6%. Digital and creative companies now pay $10,453 per annum per staff member or 47% of an average hedge fund’s rent ($22,399) up from 42% in 2008.
Savills data, taken across the 12 cities during the time period December 2008 and June 2015, shows the creative and digital office rents in Hong Kong, San Francisco and London have risen by 46%, 43% and 30% respectively.
San Francisco saw digital and creative sector rents rise by 430 basis points (bps) compared to 80 bps in the financial arena, this compares to Hong Kong where digital and creative outperformance contributed to a 460 bps rise in commercial rents compared to 190 bps in the financial sector.
Creative rents
In Sydney, Savills says, creative rents have overtaken the financial sector, standing, on average 7% higher. Meanwhile in Dubai, finance sector rents have fallen by as much as 60% since 2008 and are 41% less in Singapore when compared to 2008.
Yolande Barnes, director of Savills world research, said: 'The digital discount has eroded since 2008 as the industry continues to act as a disrupter due to its rapid rate of expansion. In cities where there is lower demand from financial tenants such as Sydney, average rents are already higher for the digital sector, while they are very similar in Dubai and not substantially discounted in Paris.
'In other locations, such as London and New York, traditional corporate financial centres such as Wall Street and the City of London are now priced lower than Midtown and Mayfair, where new creative and digital specialists in the finance sector have emerged, in themselves different to the old traditional corporate finance sector.'