US Tech companies in the UK: a real estate perspective

We've all read about it, the "AI Boom": trillion-dollar IPOs, the vast power and water requirements for noisy data centres popping up across the country, and the prospect of artificial superintelligence (ASI) on the near horizon. 

As a result of all this, it is easy to feel like AI is an abstract, other-worldly sector, distant from we mere mortals in the real estate industry, but here at Maples Teesdale LLP, we are seeing an influx of US tech companies moving into the UK market for the first time, and we are delighted to have assisted several such clients in securing their initial occupational office space in London and beyond.

Acting for US tech companies is a fantastic experience, but they are a far cry from the average corporate occupier, and your approach to the work needs to shift accordingly.

Here are my four main takeaways:

1. Speed 🏎️ 🏁 - tech companies have to operate at lightning speed to keep up with development and with their competitors, and they need their legal advisers to align with that. Expect to push hard from the minute you are instructed right up until exchange or completion. Forget any idea of protracted negotiations and point-scoring, this is a race to the finish line.

2. Growth trajectory 📈 🚀 - the growth curve for tech companies is vertical. With extensive funding and seemingly never-ending demand, tech company clients may outgrow their space very quickly, particularly if they are new into the UK market. Do not be surprised if you are instructed to act on further premises requirements very shortly after the completion of a deal.

3. Flexi, inclusive deals 🧘 🛜 - 10-year FRI leases are not the order of the day for tech companies. Expect: shorter terms, options to exit and/or renew, rights of first refusal on other space in existing buildings, and inclusive rent deals. Internet is often carved out of the rent and services, so that bespoke, high-performance connections can be secured and managed directly by the occupier – this is the lifeblood of their operation.

4. English land law quirks 👴 🤝 - do not lose sight of how archaic English land law (and doing business here in general!) can feel to US tech clients travelling across the pond for the first time. From comparatively stringent KYC requirements and the *checks notes* ‘joys’ of the Land Registry, to SDLT submissions and the 1954 Act, you should expect to be a trusted adviser on the whole process, from HoTs to post-completion, rather than just a property solicitor advising on a lease.

If you, or your client, are a tech company in need of expert legal advice for commercial real estate in England and Wales, do not hesitate to get in touch.

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