One in four London tech companies have considered moving their business outside London because of rising rent prices, a new report from Tech London Advocates has shown.
The report – Joining the Dots: Building the Infrastructure for London Tech – surveyed 200 London tech advocates and found that 25.7 per cent of those surveyed have considered relocating their business outside London in light of rising office rent prices.
The report also found that 71 per cent of those surveyed said they anticipate office rent to "rise significantly" over the next three years.
Tech London Advocates is a private-sector-led community of leaders, experts and investors.
Russ Shaw, founder of Tech London Advocates, said soaring rent prices are a major obstacle to London's tech firms.
"It has become increasingly clear that a fundamental challenge facing tech companies in London is infrastructure. The tech sector has grown so fast that the provision of office space and digital connectivity is having to play catch-up," he said.
"Together with the citywide challenge of ensuring a sustainable transport network, these issues combine to create a major headache for many tech firms at all stages in their development."
Sean Dooley, co-founder of tenant broker Perrins Dooley, said: "Rents in East London have seen a dramatic increase. Last year it was staggering because it reached £50 per square foot for the first time in Shoreditch. If you cast your mind back two or three years ago, it was £20 to £25 per square foot."
The report also found that 47 per cent of London's tech firms felt broadband provisioning is damaging the city's reputation as a centre of digital excellence.
It said: "A raft of evidence indicates that the UK, and London especially, appears at best inconsistently served by superfast broadband."
Security firm set to become part of acquisitive Shearwater Group
Distributor merges three northern sites into one new hub in Warrington
Activist investor puts forward five director candidates as turmoil continues at security giant
Nima Green asks what is driving public cloud uptake in Germany