Tech consolidates in the big end of town
With access to talent pools, government policy and cost all factors, where are the tech giants setting up shop in Sydney?
Jobs for NSW moving both Stone & Chalk and Fishburners into the new Sydney Startup Hub at Wynyard Green is part of a continuing tech consolidation trend that started gaining momentum a couple of years ago.
A JLL research report, Tech firm office location choice – how does it work in Asia Pacific?, has outlined three factors affecting location choice for tech firms – access to talent pools, supportive government policy and cost.
JLL's NSW Head of Office Leasing Dan Kernaghan said, "There has been a recent innovation push in Australia with the government throwing support behind start up incubators and accelerators.
"Most recently, the Sydney Startup Hub has taken up 17,244 sqm at Wynyard Green, which will include Stone & Chalk and Fishburners. In this case, supportive government policy has been a key driver getting this project off the ground."
There are also several grants and incentive programs targeted at start-ups in NSW. At the Federal level is the Entrepreneurs' Programme and the R&D Tax Incentive Program, while the State level has Jobs for NSW's Minimum Viable Product Grants and Building Partnership Grants.
The other piece of the puzzle is access to a wide talent pool. Hiring and retaining key talent is critical to the success of any business, and tech firms know this all too well. Location is paramount to this.
Mr Kernaghan said, "Technology firms have leased space in quality prime office buildings, and we have observed that they have chosen to cluster in close proximity to each other in and around Martin Place.
"More so, serviced office providers such as WeWork and Regus have leased space close to these technology firms. This is a common theme in global cities such San Francisco, New York and London.
"It allows entrepreneurs of start-ups to have a CBD office location, be in close proximity to large corporations, without the financial burden of signing a lease over an extended period of time."
Martin Place and its surrounds are home to a number of tech giants, including LinkedIn, Apple, Atlassian, Dropbox, Facebook and Expedia.
JLL's Australian Head of Research Andrew Ballantyne said, "We have started to refer to Martin Place as 'Silicon Place' after the clustering of tech-related firms in the precinct."
"Technology firms, in major cities around the world, have shown a desire to cluster in order to achieve the benefits of economies of agglomeration. Specifically, they are seeking knowledge spill-overs and the sharing of ideas amongst a diverse range of individuals."
Mr Kernaghan said, "Due to the low vacancy and limited new supply in the CBD over the next 2-3 years, we expect tech firms to expand their search parameter to include North Sydney and Parramatta when sourcing new office space.
"The financial metrics will be a factor in the decision but primarily it will be driven by a need to be close to rail transport, vibrant amenity and access to a large and diverse talent pool."