Connectivity has become a crucial priority for occupiers when searching for new office space. Tenants are likely to pay almost 5% more in rent on average in London for a Wired Certified building according to the latest research by Radius Data Exchange. The research analysed the digital premium associated with Wired Certified buildings, which is the accreditation delivered by WiredScore, the global rating scheme for digital connectivity.
Over the last five years there has been an upward trend in occupiers paying a premium for London office space with reliable digital connectivity. WiredScore and Radius Data Exchange’s data reveals that in London as a whole, buildings that are Wired Certified command 4.7% more in rent than in similar buildings that do not have the connectivity accreditation.
Within the London office submarkets the rental premiums attained vary, this impact was found to be more pronounced in maturing areas. Wired Certified buildings in the City Fringe and Midtown, for example, secured average rental premiums of 9.6% and 9.3% respectively compared to comparable buildings in each area that were not digitally accredited. In comparison, Wired Certified buildings in the more established markets of the City Core and West End were found to have obtained average rental premiums of 0.3% and 1.6% respectively. Whilst lower in percentage terms, these rental premiums represent significant increases in absolute terms given the high average rents in these markets.
In their analysis, Radius Data Exchange also found there to be a significantly higher presence of TMT (tech, media and telecoms) occupiers in Wired Certified buildings versus non-digital buildings, with the footprint of TMT companies encompassing 14.1% in non-Wired certified buildings whereas in Wired Certified buildings that rises to more than double at 30.2%. This makes it clear that TMT tenants place a great deal of importance on having the right digital infrastructure in place for their office space. This is only set to further increase as last year TMT companies accounted for 27% of all take-up in Central London according to Knight Frank.
William Newton, WiredScore President and EMEA Managing Director, said: “As we continue to see the wide scale adoption of Wired Certification across the commercial real estate industry, it is fantastic that London as a core market is experiencing significant rental uplift for the forward-looking landlords that we are working with.
“It is clear that as businesses become more dependent on digital connectivity, there is substantial demand for well-connected and future-proofed buildings, and those landlords that are delivering this are being rewarded with strong returns on their investment.”
Wired Certification acts as a trusted benchmark for a building’s connectivity, giving greater transparency to tenants. The certification also provides landlords and developers with the necessary insights to upgrade and future-proof their buildings’ connectivity standards.
Following the global success of the company there is now over 500 million sq ft of office space committed to Wired Certification. WiredScore now works with more than 480 forward-thinking landlords and developers globally including: Blackstone, British Land, Derwent, Legal & General, LaSalle and Hines. 1,800 buildings are committed to certification and five million people work in Wired Certified buildings across North America and Europe.
