London’s new Silicon Valleys: why young start-ups are choosing Canada Square and Croydon over Old Street

Tech City UK was launched in Shoreditch in 2010 by David Cameron to give support to a cluster of tech-based businesses that had built up around what had become dubbed Silicon Roundabout.

Today, the Government-funded project backs techie firms across London and other UK cities.

Silicon Roundabout — at Old Street — has thrived, with 15,620 new companies set up in the area during 2013/14.

However, with popularity come price hikes and today, many firms starting out prefer to join new start-up “clusters”. We look at two emerging techie hubs in Docklands and Croydon.

Canada Square

Perhaps unsurprisingly, Docklands has become a popular hub for new “fintech” firms developing financial technology for the banking business.

What Russ Shaw, founder of Tech London Advocates, refers to as the start-up “anchor” of Docklands, is Level39 at One Canada Square in Canary Wharf, Europe’s largest technology accelerator space for finance, retail and cyber security.

Nikolay Storonsky, founder of Revolut, the global money app, has been based at Level39 for the past 18 months.

“People are drawn to this area because the ecosystem for start-ups is so good,” he explains. “Here we all meet up every month and share ideas. It’s helpful to us all.’’

Value for money is another big draw with Docklands, though prime rents have risen from £36 to £39 a square foot in the past year.

It remains cheap, but is it cheerful? “Canary Wharf is an amazing place, but it’s not got too much of a heart to it at ground-floor level,” says Nick Parr from Knight Frank.

“It’s great for a few years, but people looking to move somewhere full-term are looking for an area that has character, garden squares and open spaces.”

While commercial rents remain reasonably affordable, buying a home locally can be more of a challenge.

A two-bedroom apartment in Cascades Tower is available for £535,000 through Keatons. One-bedroom apartments in the new high-end Harbour Central development on the Isle of Dogs start at £695,000.

In terms of commercial space, Level39 operates on a membership basis, starting at £1,500 a year for access to shared space, with office space starting at £2,600 a month, through Galliard.

Croydon

In south London, Croydon is home to more than 1,000 start-ups and the fastest-growing tech cluster in the capital.

“We’ve always had a thriving business community,” says Sarah Luxford, co-founder of business alliance Croydon Tech City. “What it took was a couple of individuals to bring us together and create networking opportunities — that was our role at Croydon Tech City.”

There are a range of start-up sites available, such as the new Sussex Innovation Centre Croydon, and next year the UK’s largest tech hub will open in a renovated former council building.

Affordability has played a huge part in helping the area thrive, with Croydon council offering rent-free office space to new businesses for their first year.

And when it is time to start paying, space is readily available for £10-£12 per square foot, says Will Foster from Knight Frank.

A 323sq ft office in a central location is available for £10,000 a year, through Stuart Edwards Fullermoon.

This new start-up community is helping to regenerate Croydon and the growing popularity is reflected in demand for homes. Research by estate agents Foxtons shows property prices have increased 18 per cent this year.

The sheer scale of development, however, may help to keep a lid on price rises. “You’re looking at 5,000 new homes next year, 6,300 in 2017 and 8,200 in 2018,” says Jason Hobbs, associate at Knight Frank.

One-bedroom apartments in Barratt’s New South Quarter near Wandle Park start at £235,000, while one-bedroom homes in The Tower, a 43-storey skyscraper at Saffron Square, due for completion next summer, cost about £300,000, through Martin & Co.