Commercial Blog August 2018 - Colliers International | London

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  1. August 2018

  2. Closing time over for London pubs?

    8 August 2018
    Pubs are an intrinsic part of the London landscape. There can be few foreign visitors to the capital who don’t, at least, pop their head around the door of these iconic watering holes.

    Of course, with the proliferation of so many other places to eat and drink, the pub’s place in the leisure scene has come under pressure. In the period 2001-2016, the number of pubs and bars in London fell by 25% from 4,835 to 3,615. At one point, substantially more than one pub a week was closing.

    So, it’s good to see from the latest figures from the major UK brewers and pub companies that there is a clear recent trend of ‘wet-led’ offers which focus primarily on drinking have been outperforming food-led businesses.

    Whilst a number of food operators, particularly in the casual dining segment, continue to make the headlines for all the wrong reasons, the major wet-led pubcos are reporting a different picture; Ei group has reported 0.6% growth in revenues from is leased and tenanted estate; JD Wetherspoon has also witnessed 5.2% like-for-like increases in sales; and Marston’s saw sales in its leased and tenanted division grow by 2.9%. 

    There’s a number of reasons why I think this happening. Consumers are being more cautious with their discretionary spend, and are more likely to spend £20 on a round of drinks than £40 or £50 on dinner in a restaurant. 

    A cheaper pound also means that tourists wishing to try ‘your English beer’ are more likely to have a second pint.

    From a property perspective, whereas the relationship between landowners and the food-led operators is usually a straightforward commercial contract, with periodic upwards-only rent reviews, based on a rate per square foot, the relationship between a brewer/pubco and its tenants is much more closely linked to turnover. Part of the landlord’s income is often directly linked to the volumes of tied drinks sold at the pub, and the landlord is able to help its tenants with direct interventions including marketing support, discounted wholesale prices and, in extreme cases, rebasing of rents.

    A ‘wet-led’ pub can swiftly increase or decrease staff numbers, adapt its opening times, introduce or discontinue promotional activities, or change its pricing policies. And, of course, the craft beer trend together with the increased popularity of gin and cider has brought a new focus to the recreation of drinking. 

    So, although it seemed at one point that the future for pubs lay in simply becoming restaurants-in-a-skin, there is clearly now still a place for the good, old fashioned – and profitable – boozer.

    Author:

    James Shorthouse | Head of Alternative Markets 
    James.Shorthouse@colliers.com 
    Office: +44 20 7487 1670
    Mobile: +44 7917 260054 
  3. July 2018

  4. Small is beautiful!

    25 July 2018
    A structural change in London’s office market is taking place and is being driven by an appetite for shorter lease lengths and demand for flexibility.
    Demand for start-up sized offices of under 5,000 sq ft in size in the capital is nearing an all-time high. Across London in the year to date, lettings of under 5,000 sq ft represented 78% of all occupier deals done by number. This is the third year in succession that the numbers have risen as tech start-ups and scale-ups continue to grow and focus their presence in the London.

    Post-referendum scares about a tech exodus have yet to materialise and London is firmly established in the top three global tech hubs. 

    The burgeoning demand for flexible office product is clearly good news for the co-working operators, but it has also seen ‘traditional’ landlords going on a charm offensive to woo the start-ups which one day may grow into major occupiers. Some observers feared that this attempt to ‘get trendy’ might be the property equivalent of ‘dad dancing’ with the same potentially embarrassing results, but occupiers are being drawn to what the likes of British Land, Brockton Capital, the Crown Estate and the Carlyle Group are offering.

    Interestingly, we’re seeing an increasing number of occupiers who have first gone down the serviced office/co-working route now deciding that conventional office space offers more concrete branding opportunities and sends a more sophisticated message to potential clients.

    The fact that ‘small is beautiful’ for space providers of all sorts is underlined by the statistic that growth in the small office market has been driven by demand for sub 2,500 sq ft units. It’s now at its highest level since 2012 and is particularly evident across Shoreditch, Soho and Paddington. 

    So, whilst the flexible office providers continue to develop, they are not wholly dominating this part of the market. Occupiers are drawing distinctions regarding what they can get from a serviced office and what a more mainstream provider has to offer.

    The Author

    Guy Grantham
    +44 20 7344 6793
    +44 779 596 3710
    Guy.Grantham@colliers.com
  5. Interior Shot

    NDY goes full warehouse chic for new City office location

    24 July 2018
    Acting on behalf of Norman Disney & Young (NDY), the Colliers Tenant Representation team has just acquired the 4th floor of 4 Chiswell Street EC1, near to the junction of Moorgate and Finsbury Square in a central and vibrant city location.
    Established in 1959, NDY is a global engineering consultancy that has worked on numerous iconic projects around the world creating functionality in buildings and infrastructure: from transport systems to shopping centres and office buildings to apartment blocks, the firm solves everyday problems and issues around security, IT, fire safety, movement of people and sustainability. 

    Acquired earlier this year by Tetra Tech, NDY was keen to make a design statement and reinvigorate its working environment after occupying its current offices on Old Street since 2000. 
    With 5,142ft2 now at their disposal, the polished industrial aesthetic of 4 Chiswell Street gives NDY just the canvas they need to create an inspiring and modern place to work, with an open plan floor plate, two complete walls of large windows, pendant lighting and exposed services. A colour and materials palette of white and metal accentuates to the chic modernity.
    The building has been the subject of a complete reinvention, with the interior “comprehensively redefined to reflect the expectations and requirements of tech, financial and media sectors”.

    Perhaps the piece de résistance though, is the outlook at the rear of the building across the grounds of the Honourable Artillery Company, providing occupiers with a stimulating view of tended green lawns surrounded by a compendium of city office buildings and the beautiful Georgina architecture of the HAC headquarters. It’s a unique and verdant vista in the heart of the city that many people working nearby will have no idea exists.

    The Author

    Sophie Higgins
    020 7101 2020
    07786 510 974
    Sophie.Higgins@colliers.com
  6. Maritime history reworked into creative riverside workspaces

    9 July 2018
    Metropolitan Wharf is a Grade II Listed Victorian riverside warehouse and is one of London’s most impressive wharf buildings. Sitting on the northern banks of the Thames, the building is sandwiched between the cobbles of Wapping Wall and the lapping of the river, in an atmospheric and hugely characterful location that was not only the Capital’s nautical hotspot, but also the launch pad of London’s urban renaissance.
    Wapping is gradually building a name for itself for an emerging scene of creative workspaces that sit alongside its well-established reputation for some of London’s most authentic examples of riverside warehouse apartments. The commercial space created in the 80s and 90s from the initial regeneration of the docks are now being renovated into twenty first century workspaces to match those in the City Fringe, but within a unique quarter abutting the eastern side of Tower Bridge.

    Metropolitan Wharf’s latest incarnation is courtesy of UK Real Estate whose current repositioning of the building is led by Hawkins Brown Architects. Alongside the revitalised commercial element, the refurbishment includes 8 residential penthouses from Design Research Studio, the interior design arm of Tom Dixon.

    We are offering a series of newly refurbished creative workspaces across the first to fifth floors from 1,339 to 3,237ft2. All feature open plan floor plates and a specification including high speed fibre connectivity, exposed brickwork, cast iron columns, galvanised steel perimeter trunking, suspended LED lighting and superb natural daylight through warehouse style windows inspired by the original design.

    If you seek an entrance to be entranced by, here is where you’ll find it with a grand lobby that cuts through the entire depth of the building and takes you from street to riverside terrace under vaulted brick ceilings and past a striking reception desk that evokes the headwear of early diving suits.

    The communal areas also include chill out zones, log fires and contemporary artworks that help in creating plenty of places to sit, talk and relax outside of the office spaces. Other facilities include 24-hour security, passenger lifts, secure bicycle storage and showers. 

    Also within Metropolitan Wharf is Bottega Deli, soon to be joined by a new location for a long-time favourite in the Wapping dining scene, Il Bordello restaurant and bar. There are many other great places to eat and drink that are well worth discovering in the immediate neighbourhood.
     
    Wapping’s transport offering was transformed with the coming of the Overground. Just two stops from Whitechapel and the forthcoming Crossrail interchange, Wapping is now extremely well connected to London’s transport network: just one stop from the DLR at Shadwell and two from the Jubilee Line at Canada Water, meaning Canary Wharf, the City and City Fringe are all within a 10 minute ride.

    The Author

    Joshua Miller
    0207 101 2020
    07917 725 365
    Joshua.Miller@colliers.com
  7. Love Island and a lesson for retailers

    Love Island and a lesson for retailers

    9 July 2018
    More than three million people watch each episode of the current Love Island series. In addition to witnessing the couplings of the contestants, viewers are also exposed to the programme’s sponsor, Missguided – the online fashion brand. What people may be less aware of is that some contestants are also clad in Missguided clothes. So when superfans go in search of the same outfit, guess where they end up?
    It’s an object lesson in how to blend retailing with mainstream media and the ability to buy something on your phone while you watch Georgia clash with Kazimir. 

    Any retailers who have resisted the challenge of the multi-channel world must now know that the game is up. Even if you wanted to stay faithful to a strategy that revolved entirely around your physical stores then you have most likely have been forced to the online table by business rates, lacklustre consumer spending and the fact that your competitors are opening up a competitive edge by taking a more evolved approach.

    So what does the future hold for physical stores? They won’t die out but there will be a lot less of them than even 10 years ago. However, they will be ‘smarter’ (both in terms of brand and connectivity) and also start providing a ‘real life’ portal for online brands. 

    A good example of this evolution is the French fashion brand, Sézane, which had its beginnings on eBay, before moving to a branded online platform. Having opened physical stores in Paris and New York, the brand’s creator, Morgane Sézalory, has now opened its first London store in Notting Hill, after a successful pop-up trial in South Molton Street.

    This increasing presence of pure-play online brands on the high street is being supplemented by a growing number of brands such as Samsung, Dyson and Volkswagen, which previously sold through stockists, but are now looking to go direct to the consumer through their own store networks.

    Given London’s vast array of brands and shopping offers, these trends are of central importance to the capital. Requirements from both domestic and international retailers for larger London stores appear to be reducing, but there is still demand for smaller and more affordable space with brands looking to make a flagship statement to complement their online strategy. It’s about ‘rightsizing’ store portfolios to focus customer attraction, reduce cost and drive profit. 

    The arrival of Crossrail will make London shopping destinations more accessible but it won’t be a panacea. Shoppers need to want to get to your store – there needs to be a need. 

    Whether that’s something as basic as being able to try something on or you have been compelled to visit by a fantastic social media campaign, the physical store still has a central role in retailing. Not least because people tend to spend more when they’re in a store than when they’re browsing online. 

    Like the Love Island contestants, shoppers tend to be more impulsive when they see something they want in real life.

    The Author

    Colliers Retail Agency Central London
    Bobby Blake
    020 7487 1764
    07979 594 402
    bobby.blake@colliers.com
  8. Let’s talk about Garden Walk

    5 July 2018
    On behalf of a private landlord client – someone we’ve now worked with for over a decade – we are now marketing a newly refurbished duplex office space on Garden Walk in the heart of Shoreditch, with a new refurbishment carried out by the inspirational Thirdway Interiors.
    Part of a purpose built contemporary building constructed in the mid 1990s, with an exterior clad in black tiles and copper mesh, the unit occupies the entire ground and first floors and is the only commercial space in a building of otherwise residential use. The office is fully self-contained and has its own sleek and high-profile entrance in the middle of the building’s street frontage.

    Wrapping around the central residential service core, the floor plate extends to 6,210 ft² and is split as 2,632 ft² on the ground floor and 3,578 ft² on the first floor which are linked by a spiral staircase tucked into a corner at the far end.

    A warm industrial aesthetic runs throughout with the use of complementary urban materials to create a sharp and modern workspace. A light oak floor in timber herringbone sits beneath an exposed concrete ceiling from where services are suspended in galvanised steel: white tubes of LED lighting hang from stainless steel cables and sit among the conduit, trunking and perforated channels.

    Bright white walls are offset by dark grey steelwork, window frames and perimeter trunking with the colourway and décor motifs extending to the newly refurbished male and female WCs: grey chevron tiled floors; white brick tiled walls; contemporary white fittings; dark grey accessories and grouting.

    Outside at the rear is a large, newly decked courtyard that will create an outdoor area for breakout space, informal meetings and a place for colleagues to relax, ponder and socialise.

    The location really is about as Shoreditch as Shoreditch gets: right in the heart of the Shoreditch Triangle, just off Great Eastern Street and directly opposite the Hoxton Hotel, the office is at the centre of all action in this boundary-pushing mecca of creative enterprises and surrounded by some of the best bars and restaurants London has to offer.

    Transport is no less excellent with Old Street station just a few minutes walk and soon due for its own regeneration with the transformation of the famous roundabout into a pedestrian- and cycle-friendly landscaped public piazza.  Other nearby stations include Shoreditch High Street (Overground) and also Liverpool Street, soon to be augmented by the Elizabeth Line and a new Broadgate ticket hall.

    We are quoting an annual rent of £65 per sq ft on a new full repairing and insuring lease.


    The Author

    Joshua Miller
    0207 101 2020
    07917 725 365
    Joshua.Miller@colliers.com
  9. See-through qualities: glass-fronted revamped office floors on Old Street

    2 July 2018
    You may well have noticed 140 Old Street on your way around the City Fringe: an entirely glass façade between the brick and stone elevations of the adjoining Victorian buildings creating a brazenly modern intervention in a typical, traditional streetscape.
    What is not so apparent from the front is how the office spaces within from the first floor up have large banks of glass along their entire left and right flanks as well as further windows at the rear, providing an all encompassing sense of natural light on every side.

    A development by DTZ Investors, the newly revamped floors have been finished to a Cat A standard by Peldon Rose. We currently have the ground floor and second floor units available, measuring 3494ft2 and 2568ft2 respectively, with the ground floor having its own separate street entrance.

    Inside, the open plan layouts display a modern industrial aesthetic that’s been given a singular twist through dramatic contrasts. Bright white paintwork and raised metal tile floors are offset by the use of anthracite coloured air conditioning ducts, window frames, interior doors and suspended LED light boxes, with the resulting effect of distinctive, bold and inviting workspaces.

    Amenities within the building include a passenger lift, security entryphone system, 24-hour access and sleek communal WC and shower facilities with white wall tiles and sanitary fittings matched with grey grouting and floor tiles that continue the complementary palette of the office floors.

    The location is not only supremely accessible, but also absolutely perfect for attracting and retaining the best talent for your business. Old Street station (Northern Line and National Rail) is but a few minutes’ walk and is scheduled for substantial redevelopment later this year to include a transformed ticket hall and the remodelling of the iconic roundabout into a large public piazza. 

    Just 1 minute’s walk brings you to the fantastic daily street food market of Whitecross Street – one of the most popular places to eat, meet and socialise with both local workers and residents – while the recently opened culinary boulevard at The Bower is but a few hundred yards. Effectively at the meeting point of Shoreditch and Clerkenwell, 140 Old Street is surrounded by an incredible array of cafes, bars restaurant and shops that combine to create a unique and vibrant buzz that makes it a great place to come to work. 



    The Author

    Alexander Howarth
    0207 871 7430
    0750 000 7571
    alexander.howarth@colliers.com
  10. Mic on Mondays | Duncan Walker

    2 July 2018
    Duncan Walker is Managing Director at Skyports, an urban aviation infrastructure that help the process of delivering goods by drones. Duncan tells us about the company and how it will enhance delivery and logistics in the future.

    What is Skyports & what is the service you deliver?

    We set up last year to try and capture the benefit of the emerging drone market, across the world in many places there is a lot of technological development. Actual deliveries and passenger movement by drone is now in China, the US and Switzerland, but not very much in the UK. We have been looking across the world as to where these drones are creating real benefit. Our view is that they are most beneficial in urban locations so we set up to provide landing zones, which we call vertiports, effectively heliports, for electric drones in London and other cities around the world.

    Where did the idea for the business originate from?

    My co-founder, Simon Morrish, and I originated the idea in the middle of last year when we became more and more aware of what was happening in the drone world and the amount of money going into technological development. Both in terms of the vehicles themselves and all of the enabling technology around it, the air space management and the operational platforms. However, very little investment going in to the infrastructure that enables these things to operate. I am a real estate guy by background, with that in mind we thought this was a good opportunity to try and create the network to enable drones to be very effective at the point when they have full aviation authority sign off and the technology is fully embraced and proven, our belief is that will ramp up very quickly.

    How does your service change delivery & logistics?

    It is very much an extension to the existing delivery network in more rural locations it can solve some of those very expensive, inefficient journeys which are hampered by typography, mountains and lakes, which makes ground based delivers very expensive. In urban locations, it is an extension to the same day, same hour delivery network which is very costly to logistics providers and very difficult to service in urban locations where there is lots of congestion and lots of pollution. So we are a bolt on to that service, very efficient, low cost, very predictable delivery times and viable across a whole range of goods and services.

    What is the future of Skyports?

    I think there is going to be a lot of evolution, we originally are an infrastructure place with the heliports for these cargo and passenger carrying drones, the market is emerging very quickly. Recent PWC report identified over 100 billion pound market for drones to capture and we will move with that. We are beginning to do more end to end operations in other territories where regulations are a little bit more advanced than they are here in the UK. So we may well become a service provider of sorts but ultimately we are really focused on providing that ground based infrastructure and being the heliport.

    How is Colliers helping your business grow?

    We have just started working with Colliers, Colliers obviously have a huge network across the UK for landlords and building owners. We have begun to work with them to try and explore the idea, how they can offer an additional service to their clients, how we can help them and they can help us to create that network and introduce us to a number of landlords.


  11. June 2018

  12. Making shopping special

    27 June 2018
    Increasingly the challenge for any shopping scene today is to create environments that are compelling to shoppers.
    In that context, for this year’s Midsummer Retail Report, we made a film that focused on three shops in London that we think are important for how they are adapting to the new retail landscape.

    The shops were Supreme, the Sweaty Betty store in Carnaby Street, and Selfridges If you’re over 20 years old, you may not even be aware of Supreme - unless you’re really into your streetwear.

    It’s at the epicentre of London’s streetwear scene and regularly creates a tremendous buzz at its store by controlling the ‘drops’ of the latest brands and newest products. The result can be huge queues down the street which, in turn, generates curiosity and gives the brand tremendous cachet with its target market. The constricted supply has even spawned a secondary market for Supreme products with items routinely appearing for sale on Depop and online minutes after they’ve been bought in store. 

    The Sweaty Betty Carnaby store is a milestone in the development of the brand. Spread across three floors it brings together fitness fashion and food. The central retail offer has been augmented with a fitness studio in the basement. There’s a ‘Duck & Dry’ blow dry service for post-work-out styling, and the Farm Girl café is located on the top floor. The space can now host events and has created more reasons for people to visit. It’s an object lesson in how to increase the reach of a brand. 

    The final store that the film highlights was Selfridges which might be a surprise to some – especially as there’s no shortage of pundits saying that the department store concept is dead. 

    Of course, Selfridges is no run-of the-mill store. It has occupied a special place in London’s retail scene for more than a century. But what’s remarkable is how it has not rested on its laurels. When the Weston Family bought it in 2011 it had just been named the Best Department Store in the World, but they still embarked on a huge programme of renovation, improvement and extension whilst buying in adjoining freeholds to better control its environment. The confidence and scale of this approach is best demonstrated by the huge new Accessories Hall entrance. Selfridges has reinvented the Department Store for the 21st century. So, three very different stores. The common dominator is that they all have a very clear sense of their brand and how it can be leveraged to produce shopper demand and a sense of excitement and value. 

    Later this year, we’ll see Grosvenor enable the opening of other stores which have grasped this need for differentiation. Matchesfashion.com is creating a stunning private shopper store in Mayfair while The Eccleston Yards scheme on the borders of Victoria and Belgravia will blur the lines between food, retail, co-working and wellbeing. 

    The challenge for all retailers is to nurture the kind of excitement, diversity and appeal that these types of stores can provide. And landlords need to look at how they can encourage that. 

    The Author

    Sara Law - Colliers London
    Sara Law
    020 7344 6849
    07814 495712
    sara.law@colliers.com
  13. Mic on Mondays | Dominic Wright

    25 June 2018
    Riverside Capital is a property investment company founded by Dominic Wright and Sasha Stupar in August 2010. Dominic, Group Chief Executive, tell us about the company and their recent decision to invest in the city.

    Tell us about Riverside Capital?

    We are a property investment company that offers high network investors from around the world a platform to invest in commercial property deals in the UK. We work by finding a specific building or portfolio that we like, we go out to the investors and we say; this is the specific opportunity, this is why we like it, this is how much money we think we can make, do you want to invest with us? Therefore, investors get the chance to choose which deals they come in to and how much they come in for.

    How have you worked with Colliers to invest in the City of London?

    We have a long standing relationship with Colliers and their City and West End offices. We have worked on a number of transactions with them over the years. Most recently we acquired a building in Shoreditch last year where Colliers conducted the lettings. And on our latest deal Sherborne house Colliers were acting for the seller where we were the buyer.

    What particularly drew you to the Sherborne house deal?

    Sherborne house for us is exactly what we are looking for in commercial investment opportunity, it has a prime location, it is a fantastic building. Really for us it gives us a chance to demonstrate our asset management capabilities to drive returns for investors.

    Where do you see the city market going over the next couple of years?

    I think the city market over the next couple of years is going to be in a relatively benign environment so we are expecting to see relatively low levels of rental growth. What that means is it’s all about picking the right micro locations for investing and the right buildings. As well as things like infrastructure projects such as the redevelopment of Bank station and new landmark developments like Bloomberg are going to make a difference to micro locations such as Cannon Street.

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