London's Tech City running low on office space

Technology start-ups in London's Tech City have voiced concerns that office space is becoming increasingly limited as the area receives growing attention from government and big business.

In November 2010, prime minister David Cameron set out the government's ambition for London's East End to become a world-leading 'Tech City' to rival Silicon Valley.

Pru Ashby, the group's senior business development manager, said at an event on Monday in Old Street, hosted by promotional agency London & Partners, that there are now 600 companies based in Tech City.

But start-ups at the event said that this growth is making office space hard to come by.

Georg Ell, European general manager at Yammer, explained that the search for office space was one of the biggest challenges his business faced when moving to Tech City from the US. Rents are still reasonable, he said, but availability is another matter.

The government is encouraging start-ups to spread further to the east of London, but Ell said that areas like Hackney Wick and Dalston are not ideal for setting up a business as they lack the buzz of Old Street and Shoreditch.

Google announced plans in September to take over a seven-storey building in Bonhill Street near Old Street to support start-ups.

However, Matt Evans, founder of Solid State Group and Hoxton Mix incubator, suggested that the area may need some kind of government intervention to ensure that investment from large companies does not stop Tech City attracting start-ups.