Within world cities, creative and digital businesses have been flourishing while financial corporations have been struggling to rebuild in the wake of the global financial crisis. The consequent impacts on real estates rents and growth are examined in this article.
As the finance and service revolution of the 20th century gives way to the digital age of the 21st century, we examine the repercussions for real estate.
There is a big difference in most world cities between rents paid by a creative or digital scale-up and a hedge fund, although the gap is closing. In June 2015 the total annual office rent paid for each member of staff in a hedge fund averaged $22,399 across the 12 world cities covered in this report. This compares to $10,453 per person for a small digital scale-up or creative company, which represents just 47% of the financial sector office rent. This ‘digital discount’ has eroded since 2008. At the end of 2008, the digital and creative industry paid, on average, 42% of what a hedge fund would pay in rent.