Commercial Blog January 2018 - Colliers International | London

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  1. January 2018

  2. The London office market saw robust demand in the face of wider market uncertainty in 2017

    31 January 2018
    Our latest London Offices Snapshot is now available.

    KEY HIGHLIGHTS INCLUDE:

    The London office market saw robust demand in the face of wider market uncertainty in 2017. In addition, long term commitments from Deutsche Bank alongside Bank of America, Citi, European Bank of Reconstruction and Development who are expected to sign for new HQs in 2018.
    Limited pipeline supply and occupier appetite is set to create acute shortages of prime product in many submarkets during 2018 – helping to insulate markets from downward pressure on prime rents.
    At the same time, a major influencer will be the flexible office, which in spite of hoovering up space, will deliver new product onto the market in 2018-19.
    On the investment side, Asia-Pacific investors paused for breath in Q4 but there is still plenty of hard evidence of strong Chinese (Hong Kong) investor appetite. We expect a continued widening of the overseas investor base throughout 2018.

    View the full report here.

    The Author

    Guy Grantham
    +44 20 7344 6793
    +44 779 596 3710
    Guy.Grantham@colliers.com
  3. Q4 2017: a remarkable result for the Colliers City Fringe Team

    31 January 2018
    The league tables for EG’s London Office Market Analysis (LOMA) have revealed the tremendous performance put in by the Colliers City Fringe team in the final quarter of 2017.
    Capturing 33% of the market share, and transacting no less than 42 deals, the team generated a total of 254,501ft2 in office space disposals, with the EG commenting that: “Colliers was by far the most prolific player in the City fringe”.

    Among the most noteworthy of Q4’s transactions were a trio of significant lettings: 100,000ft2 to Time Warner at 160 Old Street; the Ground & Lower Ground Floors of 80 Clerkenwell Road at a record rent of £81 psf; and 25,000ft2 to Go Cardless at Sutton Yard.
     
    While a lot of hard work and great team spirit were two important driving factors in the performance, credit must also go to landlords in providing some truly outstanding office space: for creative and professional enterprises alike, the City Fringe has some of the most beautifully realised workspaces that are an understandably irresistible draw.

    It's also yet another sign and vindication of the resilience of London's commercial property market, and of the people and companies located here. Despite a fairly drawn out background of economic and political unrest, businesses continue to fix their eyes on London for either starting up or expanding their operations.

    As the icing on the cake, the City fringe team’s performance contributed strongly to Colliers International being 2017’s most active London office agent by number of deals, completing on 240 spaces.

     

    The Author

    Elliott Stern
    020 7101 2020
    07834 918 700
    Elliott.Stern@colliers.com
  4. Spotting new proptech talent

    31 January 2018
    Colliers has just launched The Colliers Proptech Accelerator - a partnership with Global Technology Investor, Techstars. The intensive 13-week program is focused on the development and acceleration of technology driven solutions.

    The tech sector has been one of the major drivers of the London office market in recent years. You only have to look at the proliferation of tech businesses throughout the City fringe and elsewhere in the capital to see the dramatic effect of demand from the sector.

    Colliers is the dominant letting agent in the City fringe and in the final quarter of last year, we let more than 250,000 sq ft in the market. In total activity was around 700,000 sq ft and reflects sustained demand from tech and creative businesses.

    The property business itself was not an early adopter of tech but in the past two years there has been a rush of new innovation which is aimed at making the ‘mechanical’ aspects of property consultancy more efficient and, by doing so, liberate more time for the most valuable aspect of our work – the expert advice which requires experience and judgment.

    In this context, a new initiative from Colliers has the potential to power profound change in our sector. We have launched an initiative with Techstars – a worldwide network which helps entrepreneurs succeed – to encourage new innovation in the property sector.

    The Colliers Proptech Accelerator will provide early insight into companies and technologies that have the potential to provide value-enhancing strategies to our clients and improve our property skillsets and delivery.

    The initiative will identify and mentor start-ups around the globe that are developing industry-disrupting technologies in the property industry.

    The start-ups selected by the programme will be invited to an intensive 13-week course in Toronto which will be focused on the development and acceleration of technology-driven solutions.

    Applications will open in February for the first Colliers Proptech Accelerator class so if you think you have an innovation which has potential but needs to be supercharged to the next level, there’s more information here


    Author

    Helen O'Reilly

    Head of Digital Marketing | UK & EMEA

  5. In dogs we trust: UK’s largest canine welfare charity acquires extra space

    23 January 2018
    Based on Wakley Street EC1 between Goswell Road and City Road at the Angel end, the Dogs Trust has just acquired a building directly across the street to expand its operations.
    The charity has bought the freehold interest of 2 Wakley Street, a building that currently measures 7,591ft2 and has the potential to extend and create a total space of 9,932ft2.  

    Constructed in the 1980s, the building remains in fairly much its original condition with the Dogs Trust intending to carry out a light refurbishment before taking occupation. The existing offices at number 17 will be retained.

    Dogs Trust was founded in 1891 when “a small party of gentlemen brought together by Lady Gertrude Stock during the first ever Crufts dog show” formed the National Canine Defence League. Since then the charity has gone on to open centres all around the country and today cares for over 17,000 dogs each year through its network of 20 rehoming centres in the UK - and one in Dublin.

    Dogs Trust has also been involved in every piece of legislation affecting dogs over the past 125 years, from minimising their distress from fireworks to the way they are transported and general cruelty. In 1978, the charity’s former CEO coined the phrase ‘A dog is for life, not just for Christmas’ which still chimes today.




    The Author

    Ricky Blair
    020 7101 2020
    07961 104 125
    Ricky.Blair@colliers.com
  6. Back to the office

    17 January 2018
    It may be that in years to come, 2017 is seen as a pivotal period for the London office market.
    It was the year that revealed how the market was responding to the growing reality of a ‘Brexit’; and it saw phenomenal take-up by co-working and serviced office operators who went from being something of an adjunct to the ‘traditional’ leasing market to representing the capital’s biggest office provider grouping.

    These factors alone made everyone reflect on both London’s macro position as a global office destination and also on the very nature of how we occupy office space.

    Three decades ago, corporates were having to sign 25-year leases to get the space they wanted. Today, they can source offices through flexible providers for 25 months, 25 weeks or even 25 days.

    So now that we’re all just about back at our desks, what are the prognostications for the London office market this year?

    Well, in terms of the feared impact of a Brexit exodus, it’s good news that Deutsche Bank, Bank of America, Citi and the European Bank of Reconstruction and Development are expected to recommit to London this year by signing up for new HQs.  London office take-up surged in 2017 to exceed the 10-year average and pre-letting activity rose to reach 2.8m sq ft – an 87% increase year-on-year. 

    And from a space supply perspective because the development tap has never been fully turned on since the recession then there are actually locations across London where supply of space is very tight and rents are remaining relatively firm whereas they might have otherwise drifted downwards.

    The capital’s key office markets enjoyed a buoyant 2017 from an occupier perspective but that was largely due to the demand from co-working operators who, of course, immediately release space onto the market one they have ‘occupied’ it.

    There was also no shortage of demand on the investment front as the flow of overseas capital was augmented by concerted buying from Asia-Pacific investors.

    So, altogether 2017 was probably a ‘glass half-full’ year for the London office market but there will be many twists and turns on the way to a Brexit and it remains to be seen what the long-term effect of the new wave of flexible office space providers will be.



    The Author

    Guy Grantham
    +44 20 7344 6793
    +44 779 596 3710
    Guy.Grantham@colliers.com
  7. 207 Kings Cross Road WC1, Office Space, For Rent, To Let
    207 Kings Cross Road WC1, Office Space, For Rent, To Let
    207 Kings Cross Road WC1, Office Space, For Rent, To Let
    207 Kings Cross Road WC1, Office Space, For Rent, To Let
    207 Kings Cross Road WC1, Office Space, For Rent, To Let
    207 Kings Cross Road WC1, Office Space, For Rent, To Let
    207 Kings Cross Road WC1, Office Space, For Rent, To Let
    207 Kings Cross Road WC1, Office Space, For Rent, To Let

    Instrument House drums up demand from international investors

    15 January 2018
    After successfully finding tenants for all the office units at Instrument House in Kings Cross last year, we were instructed to find an investment buyer for the freehold interest...
    The sale presented a rare opportunity to acquire a prime office building in the heart of Kings Cross, which is now Europe’s Tech and Innovation Centre. Newly refurbished by Stiff + Trevillion Architects to a high specification, Instrument House provides a total of 12,232ft2 of beautiful office space over lower ground, ground and four upper floors. 

    After we let the building to four occupiers, the total passing rent being generated was £757,639.50 per annum from tenants in four sectors: PR (CC Group Communications Ltd); management (The Foundation Growth Consultancy Ltd); tech (Muso TNT Ltd); and online marketing sectors (Bounce Interactive Ltd and Mount Media Online Ltd).

    Our instructions were to seek offers in excess of £14,200,000, reflecting an attractive net initial yield of 5.00% (assuming purchasers costs of 6.73%). After a successful marketing campaign we eventually agreed terms at £15,000,000 to a private Hong Kong buyer, representing £1,226 per ft2: a record price for the area.

    While that’s a testament to the quality of the development as a whole – with its particularly winning combination of architecture, design and specification – it’s also a reflection of just how far Kings Cross has come and how fast in such a short space of time.

    From being on the fringes of the city fringe to becoming a prime destination in its own right, the neighbourhood has grown and evolved tremendously. There is a remarkable sense of completeness to Kings Cross with its high quality homes and offices extremely well served by an incredible selection of restaurants, bars, shops and striking public spaces. Not to mention, of course, the Eurostar terminal at St Pancras International.

    It is extraordinary for an area to pop on the radar of long-term international investment buyers so rapidly, but then again, Kings Cross is a long way from ordinary.
     
     


    The Author

    Richard Silver
    020 7101 2020
    07980 205 293
    Richard.Silver@colliers.com
  8. Wise move: The Wisdom Council swaps bland for grand

    11 January 2018
    The Wisdom Council has just completed the move from fairly bland and faceless serviced offices to the glamour and personality of what is probably The City's most creative and cool office building.
    Founded in 2013, The Wisdom Council helps financial services firms shape their thinking on strategy, propositions, new product development and service delivery. The company connects across the financial services industry with regulators and policy-makers, industry and media commentators, manufacturers and intermediaries, traditional firms and FinTech start-ups.

    The company’s new home at Cannon Green is from developers Ocubis whose building has certainly moved things forward in the City office market.  Noticing the beginnings of an exodus from businesses at the more creative end of the Fintech and Recruitment sectors, Ocubis seized the opportunity to seduce those firms eyeing up the superior facilities, design and fun of city fringe co-working spaces.

    Cannon Green is therefore a very different workplace in the heart of the Square Mile; a building that blurs the lines between what is available in the City and City Fringe, but stands in stark contrast to its immediate neighbours.

    On an island site just north of Upper Thames Street and offering approximately 82,000ft2 of modern office space, the building recalls various aspects of London’s heritage, from private Victorian members’ clubs through the city’s industrial age and right up to its current status as a futuristic creative, tech and media hub. 

    Among a host of alluring tenant amenities are a business lounge, Gymbox gym, a bike cub & repair shop, three large terraces and The Listing, a new concept Drake & Morgan bar & restaurant.

    Cannon Green could well be a nod to the future in how office space in the still-rather-traditional City may need to adapt. As the desire for a more contemporary approach to working environments reaches out of the creative world and across the professional sector, the City will need to keep up with the concerns of the day to avoid losing its occupants to nearby Clerkenwell, Farringdon and Shoreditch.


    The Author

    Mark Bott
    0207 101 2020
    07879 890 115
    Mark.Bott@colliers.com
  9. The skyline tells the story

    11 January 2018
    The capital’s skyline has been very much in the news during the first few days of 2018.
    The City Corporation has released a series of remarkable CGIs showing what it thinks the Square Mile’s skyline may look like in 2026. The jostling group of towers – some already built, some under construction and some still on the drawing board – speak volumes about how attitudes to development in the City have changed in recent decades.

    Thirty years ago, relatively modest developments such as Alban Gate on London Wall or Minster Court in Mincing Lane (you can just see the latter’s ‘steeple’ dwarfed in the middle of the image above) were the subject of huge planning deliberation and caution.

    The advent of Canary Wharf and the competition for occupiers it brought, changed all that. The City started taking a more pro-development stance which has given us buildings such as The Gherkin, Walkie Talkie, and the Cheesegrater (somewhere along the way nicknames replaced the best that marketing agencies could come up with).

    This atmosphere also paved the way for The Shard which - for the foreseeable future - will continue to stand head and shoulders above everything else on the South Bank.

    Meanwhile, over at Canary Wharf, an announcement last week showed how times have also changed there. When the massive urban regeneration scheme launched. the emphasis was very much on wooing banks and financial services businesses. In contrast, Brookfield has just said that it will retain around one million square feet across three new residential towers on the wharf to rent out as its first foray into the London private rented sector.

    The final skyline ‘sign of times’ was over in Kensington where it was announced that the legendary Roof Gardens on top of the Derry & Toms building are to close their gates. An iconic party venue in the ‘loadsamoney’ eighties, the gardens flourished when people tended to party ‘up the West End’ whereas their contemporary counterparts are more likely to be found in Hoxton, Shoreditch and Dalston.

    It seems that London’s skyline continues to tell a vivid story about where the capital is heading.


    The Author

    Natalie Lelliott
    02074871853
    07702975683
    Natalie.Lelliott@colliers.com
  10. Say moo to cattle-class workspace at Black Bull Yard’s last available office

    8 January 2018
    If the City Fringe is about anything, it’s about breaking free from the herd: nobody brings their business to the neighbourhood in the hope of going unnoticed, and nobody is on the hunt for a second-rate office.

    It’s those driving factors that have inspired such creativity and innovation in workspace design in Clerkenwell and Shoreditch, but sometimes there’s a building that goes just that bit further to stand out from the pack.

    Designed by the Clerkenwell based practice GPAD Architects and developed by Boultbee Brooks, Black Bull Yard provides 5 incredible office floors in a new building behind the original façade of a former Victorian warehouse.

    Unsurprisingly, the scheme has been a hit with occupiers and now just one office unit remains available – a second floor space of 5,406ft2.

    Sitting squarely on Hatton Wall that connects vibrant Hatton Garden to Leather Lane and its long established food market, the development’s location is as exciting and vital as the offices within.

    From the minute you enter the remodelled reception from a newly landscaped courtyard, the attention to detail and uncompromising quality is immediately apparent. Head up to the office floors and the sense of unbridled excellence only increases.

    While the specification reads like a wishlist of cutting-edge cool, it’s the way it’s delivered that gives it that vital edge, with meticulous finishing absolutely everywhere. New raised access flooring; new black powder coated suspended LED lighting; new self-contained WC facilities; exposed ceiling services; new comfort cooling and heating throughout; exposed brickwork; excellent natural light on four elevations and ceiling heights between 2.8 to 3.0m all go together to deliver truly breathtaking interiors. 
    Amenities for tenants include shower facilities, on-site bicycle storage, a communal terrace on the third floor and an 8-person passenger lift.

    Black Bull Yard is a fine and fitting addition to each firm’s canon. 


    The Author

    Elliott Stern
    020 7101 2020
    07834 918 700
    Elliott.Stern@colliers.com
  11. December 2017

  12. Getting fit isn’t just about gyms

    14 December 2017
    Bored by the treadmill? Cross about cross-training? When it comes to getting fit, the gym isn’t everyone’s cup of tea so it’s interesting to see the proliferation of new fitness concepts across the capital.

    For the frustrated prima ballerinas among us there is Barrecore which combines the essentials of a ballet class with targeting all-round fitness and working specific muscle groups. It draws on a variety of fitness regimes such as high intensity interval training and asana yoga to provide a progressive programme of classes.

    Intriguingly, one new concept in the capital which was conceived not primarily as a fitness offer is attracting people for just that reason. Chel-Ski – ‘where London meets the mountains’ – essentially uses a huge broad conveyor belt which replicates the slopes by tipping to steepening angles and speeding up to mimic an accelerating downward descent.

    It is also a phenomenally good work-out for the muscles that are intrinsic to skiing. Whereas on a dry slope you might be skiing for, say, a minute before you reached the bottom, the Chel-Ski machines mean you can ski for pretty much an indefinite period of time. For legs in the skiing position for minutes on end, it brings a new meaning to ‘feel the burn’.

    From a property perspective, the rise of these concepts is interesting as they are relatively premium activities (single sessions at Chel-Ski and Barrecore cost from £40 and £28 respectively), but they often occupy premises which have a modest cost profile and are not in prime locations. Chel-Ski is located on an SW6 light industrial estate and Barrecore occupies a variety of spaces including lower ground floors – basically space which is often not the most attractive to many other users.

    It also illustrates how the health & fitness sector is diversifying and that landlords need to be aware that they shouldn’t just be thinking about traditional gyms when they consider who could be right for space.

    By Ross Kirton

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