London’s tech sector is breathing new life into the city’s downtown office market, which has struggled with chronically high vacancy rates since the early 1990s.
Around 20 per cent of the core’s 4.4 million square feet of leasable space still remains available. But Peter Whatmore, senior vice president of CBRE Southwestern Ontario, says the city’s thriving tech sector is beginning to play an important role in the transformation of downtown London.
“Tech companies now see downtown as a really good option for both great space options as well as lifestyle and attractive amenities,” he notes.
With more than 300 digital creative companies employing around 9,000 individuals, tech is becoming one of London’s leading economic drivers.
In the past two years, large players like Autodata Solutions have been drawn to the core from other areas of the city, while other established firms – including Start.ca, InfoTech, and Voices.com – are expanding their downtown office space as they continue to grow.
“London also has a lot of gaming companies and HR-based companies. It’s a good blend,” Whatmore says. “They’ve all enjoyed tremendous growth over the past five years.”
Mobials is one of London’s most recent success stories. The company offers a suite of digital retailing tools designed to drive high-quality sales leads. It grew from 15 to around 35 employees last year and is on track to double that in 2018.
In anticipation of the need for more space, the firm recently signed a lease agreement that will facilitate the restoration of one of downtown London’s most significant heritage properties.
Paul Dugsin and his partners at Century Mews Inc. purchased the former Loews Theatre and Century Theatre buildings at 192 and 194 Dundas Street in 2010. After five years of painstaking renovations, the buildings were transformed into a mixed retail-office complex.
After occupying two renovated upper levels, Mobials will expand into the long-vacant ground floor of the Century Theatre – a space that retains its vaulted ceilings, mirrored walls and chandeliers.
Renovations are already underway, Dugsin says. “This downtown gem is now being repurposed and restored for a tech company, right in the heart of London. It’s a combination of the old London with the very new London, all in one location.”
Tech companies like Mobials are often attracted to unique office space that reflects their company culture.And while downtown London still offers opportunities for creative heritage restorations, Whatmore says London landlords are also transforming more traditional buildings into something fresh and new.
This was the approach taken at Citi Plaza. Built as an urban shopping mall in 1989, it is now a busy mixed- used facility and home, since 2011, to Digital Extremes.
Today, the gaming company is expanding its presence in the complex, which sits in the heart of London’s core.“They are one of the major players in London,” says Avison Young sales representative Michael Gabriel. “Having a thriving tech company in this building is great for the property, and for the downtown as a whole.”
As a global leader in the video gaming industry, Digital Extremes needed a location that would help attract and retain top talent, says Charlie Gobert, vice president and sales representative with Avison Young.
“We understood their vision and went in and opened up the existing space to bring in natural light and create a large, open floor plan so they could go in and create what they wanted,” explains Gobert. The result is a sleek, modern global headquarters that features an elevated boardroom, plenty of natural light, and a layout that facilitates collaboration and creativity.
Keith McAlister, leasing manager with Summit Properties, agrees that the shift to a more collaborative work culture is driving the demand for innovative office space. “Today, companies will put six people at one long table so they can all work together. Before, they would have had six cubicles, or six separate offices.”
Summit Properties owns around 750,000 square feet of Class A office inventory, including downtown’s Talbot Centre.The office tower complex offers a variety of space options, along with building amenities including a shopping mall concourse and plenty of on-site parking.
“We are seeing more people interested in living and working downtown,” McAlister comments. And thanks to the surge in the construction of downtown high-rises, the number of young professionals choosing to call the core home is only expected to grow.
“London has always had a funky downtown,” Whatmore notes. “We have a lot of entertainment options, restaurants, and great shopping. People want to be close to that and enjoy the full urban experience.”
Read the full Perspective London 2018 Globe & Mail feature here.