While the new $35 million Sydney Startup Hub was recently announced for York Street, along with York Butter Factory’s new Sydney co-working space at Redfern, one real estate firm has no doubt where the centre of the tech industry is in the city.
Research from property consulting giant JLL has found that Martin Place — long the epicentre for the financial sector — has emerged as a dominant hub for the country’s most prominent tech companies.
“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,” said Dan Kernaghan, JLL’s NSW head of office leasing.
With the Martin Place area hosting companies like LinkedIn, Apple, Atlassian, Dropbox, Facebook and Expedia, JLL Australia head of research Andrew Ballantyne said his own staff had given it a nickname.
“We have started to refer to Martin Place as ‘Silicon Place’ after the clustering of tech-related firms in the precinct,” he said.
“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.”
Atlassian has even doubled down in the area, this week taking Business Insider on a tour of its modern new office just a few doors down from its existing headquarters.
JLL found that access to “a wide talent pool” is important for tech companies.
“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,” they said.
Kernaghan said that the clustering of big tech in a specific area has also led to serviced office providers like WeWork and Regus to also setup shop close by.
“This is a common theme in global cities such San Francisco, New York and London,” he said.
“It allows entrepreneurs of start-ups to have a central business district office location, be in close proximity to large corporations, without the financial burden of signing a lease over an extended period of time.”
However, the realities of Sydney real estate means not everyone will be able to grab space at Martin Place.
“Due to the low vacancy and limited new supply in the central business district 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,” said Kernaghan.
“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.”