Commercial Blog March 2018 - Colliers International | London



  1. March 2018

  2. Influence spells investment

    14 March 2018
    There are some interesting correlations in the latest Colliers Cities of Influence research which is being launched during MIPIM this week.
    Aside from a limited weighting to office rents and occupational costs, the study analyses European cities in the context of eight non-property metrics. These span categories such as the supply of ‘Fresh Talent’ being generated by each city’s higher education systems and also ‘Employee Aspirational Factors’ which essentially gauge how pleasant a city is to work in.

    Along with other more prosaic measures like ‘Economic Output’ and ‘Workforce Catchment’, the report analyses a total of more than 150 data metrics which enables a ranking of Europe’s great cities. While the overall scores tend to favour the cities with larger catchments, the analysis examines different aspects of each city in proportional terms to provide fair coverage to both big and small – and some locations certainly punch above their weight.

    With Brexit uncertainty placing a question mark next to the attractiveness of the UK to globalised businesses, it’s comforting to see that London ranks at No.1 in the analysis. 

    Digging deeper into the findings, it is also interesting to see that – with Europe facing an imminent capacity constraint in terms of very low unemployment levels combined with shrinking working populations - London also leads in the Latent/Future Talent category. In short, it’s best positioned to offer occupiers the best options in terms of latent and future talent to help drive their growth needs. 

    London is followed closely at the top of the rankings by Paris. The top ten also features a mix of large to small including Madrid, Munich and Moscow. Southern European cities including Madrid, Barcelona, Milan and Rome score strongly courtesy of high youth unemployment which is driving strong latent talent pools. The big question for these cities is whether they can create the right jobs to hang on to this talent, and stem the exodus of workers leaving in search of better employment opportunities across Europe.

    The question is: does this combination of largely non-property metrics now influence the flow of investment into property? Well, if the top three ranking cities are anything to go by the answer is ‘yes’. London, Paris and Madrid were also the top three investment destinations in 2017.

    There seems to be a clear correlation that investors are buying into cities which not only have some of the best property in the world but also have the best current - and potentially long-term - drivers to capture and retain the talent that can help drive business growth. 

    Director | Head of EMEA Research
  3. Mic on Mondays | Colin MacGadie

    9 March 2018
    As part of this week’s Mic on Mondays series we spoke to Chief Creative Officer at BDG Architecture and Design, Colin MacGadie. BDG is a creative business and Colin’s job is to look after the overall creative vision for the studio, business and client projects.

    You can read the full interview below, or view the highlights of our chat on our YouTube channel. For more episodes make sure you follow us on Instagram @Colliers_London.

    What are the factors that go into designing a building or space?

    We have a fairly ridged methodology as a studio, because we value the science of built environment and design, as well as the artistic side of it. We spend a lot of time with our clients, trying to understand their requirements, their needs, what they expect, their aspirations and goals for a project. We do this through a process called evidence based design. It doesn’t matter what our design ideas are, we always want to hang them on a clear piece of data evidence that shows it will add value to the project. Evidence based design is our mantra and touchpoint for all of our projects.

    The way we break that down, is we look at two key factors when starting a project. We look at the special parameters, constraints and objectives; then we look at people based objectives for a project and we put them both together. We believe that the built environment can have such a positive impact on people, behaviour and life in general. Whether it’s how you lay out your desks in an office to get people to work better, or how you lay out a space when you arrive into a new building to get an overall experience. So we have a strict process to bring people and spaces together.

    How do you judge how people are going to interact with a space?

    We have an extensive tool kit. We spend time with people, we interview people and, if we can, we like to speak to every member of staff in an organisation. So we give everyone a chance to tell us how they want their space to look. I guess one thing that’s a USP for us is we have people here that don’t design for us, they just observe people in space. They look at the dynamics of an organisation and how people are performing, not the space, but absolutely focused on the people. So for example on Sea Containers for Ogilvy & Mather, which is our flagship project in London, it took us nearly 4 years from competition pitch to the end, we spent 9 months with the client.

    What is your biggest achievement?

    There are two sides of that. There’s the biggest achievement that we are best known for and that is Sea Containers for Ogilvy & Mather. It’s our biggest refurbishment in London recently and it’s won awards for innovation and fit out. People know about it now, so we’re getting contact from new clients wanting to see the space and know how we did it.

    I think the second achievement as a business is 6 years ago, just before pitching and winning that project, we were a small niche design studio of 15 people. Off the back of winning this pitch against stiff competition, we are now a studio of 50 people and developing in 9 different countries around Europe. This has all happened in the space of 4 to 5 years, so as a leader of the business this is a massive achievement.

    What does the future hold for BDG?

    We had a very successful 2017, both creatively and financially, we won awards for projects with major clients. As we come into 2018, even though it’s all very doom and gloom in the media, I don’t see our success diminishing. I can see a longevity to the workflow at the moment, so the future looks good.

    What are the current trends in architecture and what are your views on them?

    We have two types of clients, we have end user clients and developer led clients. In both clients we are seeing a big emphasis on the wellness agenda; providing staff amenity space. Base build developers are doing it from day one and using this amenity to sell their space. Then there are end users doing it within their own fit out to retain staff talent. I think this is a good thing for the individual because if you can go into an environment that keeps you healthy that’s a real positive.

    My concern from an industry perspective is we are drifting down the route of wellness becoming a tick box exercise. The danger is because you can measure it, people just assume you are doing it right. We are all saying we are doing it, but are we really pushing that agenda forward? As a company we are actively trying to make sure we are approaching our wellbeing projects with a holistic, slightly more creative differentiator than our competitors.

  4. Playing the relocation game for rent reductions and reinvention

    5 March 2018
    When we talk of businesses relocating, the conversation is generally around size. Usually that means expansion, but companies do also shrink their operations, and not only for negative reasons: new technology, freelancing and outsourcing can significantly reduce the amount of space a business requires.
    In recent months we’ve helped companies relocate for all manner of reasons. As rents increase and new enterprises move in, existing occupiers may cast their net wider for lower outgoings. Some may seek to grow up and move to a more mature environment, while others might wish to come out of a co-working space and into a home of their own. A simple upgrade of amenities might be another driver.

    Among those seeking more competitive rents were video ad tech firm Unruly, moving from Shoreditch to 25,000ft2 in Whitechapel. GTI Media swapped Farringdon for Southwark into 4,000ft2 of cheaper, more flexible space. In a less-than-obvious move, Echo Architecture left Farringdon for Canary Wharf, enabling the acquisition of 8,000ft2 from their previous 4,000 ft2. Given the amount of floor space these firms are occupying, the savings on costs are not insignificant.  

    Shoreditch being a cheaper option isn’t something we’d been expecting to write, but when compared to rents in Kings Cross, it does indeed represent excellent value. Whitechapel & Aldgate are drawing people out of Shoreditch and Spitalfields; Southwark now has enough to pull to wrest companies away from Farringdon; even Canary Wharf is on the radar outside of the financial sector, due in no small part to its increased connectivity.  When the Elizabeth Line station opens, the journey to Farringdon will be a mere 8 minutes; when that particularly penny drops, we suspect more creative enterprises will follow Echo’s lead. 

    Even with the influx of FinTech companies Shoreditch has steered clear of becoming too polished and somehow keeps an (albeit mildly) anarchic edge. But head a mile down the road to Farringdon, and things have taken a different path. 

    In a seemingly conscious shift from urban to urbane, the EC1 postcode has carved out a separate niche to Shoreditch – just stand outside Farringdon station to notice a markedly different passenger to those using Shoreditch High Street and Old Street. Farringdon has evolved and its maturity has altered its attraction. That was picked up on by Moo, an enterprise vastly matured since its beginnings, and the company shifted its operations from Shoreditch to Farringdon, taking up 35,000ft2 in the former Meryll Lynch building above the Station.

    Tech design agency Foolproof made the same move, although in the opposite direction, swapping Clerkenwell for Spitalfields to get not just 8,500ft2, but also its own front door and an improved environment for the workforce. 

    Shared workspaces and serviced offices are a hit with fledgling businesses. Flexibility in lease terms and the ability to up- or down-size swiftly and without penalty are hugely attractive, but once the dust has settled a clear trajectory determined, the desire for permanence comes to the fore.

    We touched recently upon Playbuzz swapping its co-working location on Wimpole Street for a self-contained office in Covent Garden, and that story is much the same for tech firm Bloomreach who took its London office out of a co-working space in Moorgate and into a 1,600ft2 self-contained office in Clerkenwell.

    Why move for one reason when you can upgrade all areas? The rapidly expanding student affinity network UNiDAYS has gone from 3,500ft2 to 15,900ft2 in a mere 12 months. Saying goodbye to Spitalfields, UNiDAYS went a short distance to Aldgate for better value, more space, business expansion and greater gravitas.

    A lesson we can take from all of this, is that the benefits to gained from relocation spread far wider than simple business expansion. If you’d like us to help with any of your business moves, we’d love to talk to you. 

    The Author

    Sophie Higgins
    020 7101 2020
    07786 510 974
  5. The name’s Bond: suitably sharp new offices opposite Farringdon station

    2 March 2018
    We’ve recently started marketing a collection of beautiful new office spaces on Farringdon Road in a fantastic former factory on a prominent corner site.
    The Bond Works, developed by our clients NFU Mutual, is the result of a complete refurbishment of a stunning Victorian building that was in 1882 as the home of engineering company Marshall Sons & Co, an engineering company from Lincolnshire that made steam rollers, traction engines and agricultural machinery.

    Consisting of 6 floors of beautifully crafted office space, with floors 1-5 between 3,200 and 3,700ft2. The top floor measures 2,669ft2 and is cut back from the building line along both exterior sides to allow for two balconies, each running the full length of the wall with original stone balustrades.

    In fact, each office benefits from two exterior elevations and is thus somewhat flooded with natural light through new powder coated double glazed casement windows to match the originals. the building is a beautiful corner property and makes a striking first impression.

    Inside, the specification includes grit-blasted brick walls, ceiling-mounted lacquered LED light boxes, and raised metal tiled floors with air conditioning below. A beautiful new contemporary reception area on the ground floor provides a smart and welcoming entrance for occupiers and their visitors, with high ceilings and tall warehouse-style windows.

    Developed by NFU Mutual, the building has been completely reimagined to a superb contemporary standard that reflects the needs of modern businesses but that respects and celebrates the building’s heritage and fabric.

    With 2 x 8-person passenger lifts, 3 showers, 15 cycle spaces and18 lockers, the building has been designed with plentiful of useful amenities that reflect and support the way people come to work and use their environment.

    Surrounded by one London’s most eclectic and cool gatherings of fantastic places to eat and drink from breakfast till bedtime, The Bond Works is also just moments from Farringdon station and thus supremely well connected. The existing Thameslink and Underground services are soon to be joined the Elizabeth Line on completion of the transformative Crossrail project, creating a major Central London interchange quite literally across the road from these offices.

    Works are due to complete Q3 2018. 

    The Author

    Alexander Howarth
    0207 871 7430
    07841 514264
  6. Insta puts property in the picture

    1 March 2018
    Not so long ago, Instagram was a social media channel dominated by food, fashion and travel. Its image-based approach was ideal for friends sharing stuff that had literally caught their eye. While Twitter became increasingly orientated to b2b communication, ‘Insta’ remained mostly rooted in the domain of personal chat.

    Today, that is changing rapidly, Twitter is haemorrhaging users (500m down to around 330m) while Insta is inexorably increasing its reach. Twitter is trying to fight back: increasing its message character count to 280 and encouraging the use of pictures and video. Somewhat ironically, Twitter has now taken a ‘if-you-can’t-beat-em-join-em’ approach and uses Insta to promote its own content. It has 410,000 Insta followers. 

    So why is all this important for the property business? Well, let’s start with the basic stats: Insta has around 400m users and is growing rapidly. More pertinently, over 200m of those users view a business profile on the channel every day and swipe-through rates to view more info can average around 15-20%. ‘Instagrammers’ are increasingly influenced by the channel with regard to which restaurants and bars they go to, and in the retail sector, the number of Insta followers that a brand has is a key metric when landlords evaluate who they want to put into their shops and centres. 

    This is a particularly interesting starting point if you’re looking at online ‘pureplay’ brands which have not yet taken physical stores. 

    In the physical retailing environment, the power of brands to mobilise footfall through their Insta followers is huge – and, by extension, they are also promoting whatever shopping location where their stores are to be found. A brand’s presence on Instagram is becoming a dimension of its covenant strength. 

    In return, landlords are also getting into gear on Insta. Check out accounts like CarnabyLondon and ConnaughtVillage if you want to see how Insta can convey the heart and soul of place – whether you’re down the road or on the other side of the world. 

    So if you’re in the property business and you’ve not yet done so, it may be time to become an Instragrammer.

    The Author

    Sara Law - Colliers London
    Sara Law
    020 7344 6849
    07814 495712
  7. Leading crypto currency firm moves new money into the City

    1 March 2018
    Colliers recently acted for a leading crypto currency market maker in acquiring a 67-desk space in the heart of the City.
    Spaces, the co-working brand of serviced offices provider Regus, occupies four floors of the striking City Point building at 1 Ropemaker Street. As well as some fantastic views across London, the Spaces interior has recently undergone a complete reinvention to create a design-led location in a corporate building, mixing a creative and professional environment.
    Alongside designated offices and bookable meeting rooms, the plentiful communal break out spaces and onsite café with trained baristas give out something of a City Fringe vibe. It’s very much in keeping with a gradual but noticeable shift in City workspaces to compete with the open, modern and relaxed style of nearby Clerkenwell and Shoreditch. 

    City Point is one of the tallest buildings in the Square Mile, an iconic skyscraper from 1967 that was originally built as the headquarters of BP and named Britannic House - it was also the first building in the City of London to exceed the height of St Paul’s Cathedral. In 2000 a full refurbishment was carried out, including the addition of an extra 5 metres height, taking the 35-storey building to 127 metres tall. 

    Part of the Spaces sell is flexibility in both the length of occupancy and the workspace provided. As such, the landlord delivered a bespoke configuration to suit the tenant’s brief of a private open plan office space with accompanying meeting rooms for the tenant’s sole use.  Agreeing to a 12-month term allowed  the tenant to retain agility around a business plan of continued growth and expansion.

    A central, well-connected and easily accessible location was another key element of the brief and, with Ropemaker Street just around the corner from both Moorgate and Liverpool Street Stations, City Point was just the ticket.

    The Author

    Mark Bott
    0207 101 2020
    07879 890 115
  8. February 2018

  9. Working with children and animals: the rise of the crèche and pet-friendly offices

    28 February 2018
    It’s a remarkable thing how changing trends in the domestic circumstances of employees can influence not only an employer’s operations, but also its chances of attracting the right workers in the future.
    The effect moves swiftly up the food chain as well. As tenants require ever more from their workspaces, so landlords and property developers must respond if they want their buildings let and to keep apace of demands.

    We’ve seen this in a number of areas. A lot of creative companies can’t afford to be based in the West End, so employers must relocate further East. As far fewer people drive to work, basement car parks become cycle stores and shower facilities, or are sold off to become fitness studios and gyms. Now, being able to bring the dog to work or having childcare facilities at the office is bringing new demands on employers, and consequently on providers of workspace to meet these evolving requirements.

    Last year we acquired space for the marketing agency 4Ps whose new office includes a crèche for its employees’ children and welcomes its workers to bring their dogs to the office. We also acquired space for Dogs Trust, where, somewhat unsurprisingly, many people take their dogs to work.

    In London Fields, a new co-working building from Second Home really welcomes working parents into the fold: as well as an on-site crèche, there’ll be milk-warming facilities in the greenery-filled cafeteria and parking for buggies and scooters. Parents can pop into the nursery whenever they like, or be updated when their child goes to sleep, or be left in peace has crèche facilities alongside a number of socially interactive spaces, services and programmes.

    The revamp of Sea Containers House on the South Bank was heavily based around social interaction and the building has a dog-friendly policy, while serviced office provider WeWork extends a warm welcome to pets at many of its locations. 

    While these new facilities and policies are mainly a feature of new buildings and workspaces, established buildings will need to update their offering in order to retain their existing occupants, attract new ones and to ensure rental levels don’t slide.

    Even when we are out on viewings, it’s quite common for company directors to bring along their dog when looking at potential workspace. So having rooted itself into the culture modern creative enterprises, the practice of bringing home life to the workplace is clearly one that is here to stay.

    The Author

    Dash Boyeva
    020 7344 6623
    07811 111888
  10. Polished off: first and second floors at former diamond workshop now let

    26 February 2018
    All floors of the arresting 15 Crinan Street development in Kings Cross are now occupied or under offer. Champion Sportswear, a long-established name in fashion, will occupy the first and second floors of the building as their UK HQ. The firm has also recently opened a flagship store on Brewer Street in Soho.
    Other occupants at 15 Crinan Street include the precision lending start-up Boost & Co, whose innovation in the financial sector has given SMEs a modern and less rigid alternative to standard banking loan models.

    A former Victorian-era diamond workshop, the building has been given an arresting refurbishment under the direction of Gpad architects that is as multi faceted as the gems that used to be fashioned here. Extending to a total of 7384ft2 across 6 storeys – lower ground to 4th floors – the refurbishment employs a rich palette of contemporary and vintage fittings in a specification that not only looks to the future, but also deftly evokes the sense of age-old craftsmanship.

    Each one of the floors wears its heritage with pride and there are plenty of girt-blasted walls and chimneybreasts as a reminder of the building’s history. Extra personality comes from the style of windows on the different levels, from full height picture windows and street frontage on the ground floor, through brand new large sash windows on the 1st to 3rd floors, to the wrap around floor-to-ceiling glass walls in the new top floor extension. 

    That stylish and timeless backdrop has been beautifully augmented by a combination of industry, hi-tech and heritage-inspired materials and finishes including beautiful oak parquet floors, exposed overhead services in galvanised ducting and suspended halos of LED lighting.

    Even the communal wc and shower facilities are something of a work of art, finished in a palette of white, black and anthracite, offset with muted ochre accents, and feature high quality fittings and accessories alongside stunning geometric tiling inspired by the building’s gemstone legacy.

    The location is a classic Victorian back street that has seen remarkable transformation, both in the repurposing of its former industrial buildings alongside the landmark new development of Kings Place. Just yards from The Regent’s Canal and Battlebridge Basin, 15 Crinan Street is well placed to enjoy the remarkable buzz of Kings Cross including Pancras Square, Granary Square and a unique and vibrant waterside scene.

    The Author

    Alexander Howarth
    0207 871 7430
    07841 514264
  11. Victorian values: high standards and classic London interiors at Old Street

    23 February 2018
    In a world of converted warehouses, repurposed factories and glass fronted office blocks, the refurbishment of 91-93 Great Eastern Street stands out as an archetypal and elegant slice of London Victoriana.
    Located at the point where Great Eastern Street meets Old Street, floors 1, 3, 4 and 5 of this gateway corner building have been refurbished and are available to let on a floor-by-floor basis. However, the second floor is scheduled for refurbishment after the existing tenants vacate in May, meaning an occupier could take the entire upper floors, securing a total of around 9,500ft2.

    As things stand today, the first and third floors each extend to around 2,400ft2 and form part of the original Victorian structure. There is something instantly familiar – and indeed comforting – about these office spaces: they feel, in very many ways, just like home and display the characteristics of houses that so many Londoners will have either grown up in, or live in today. 

    Sash windows, tall skirting, panelled interior doors, ornate fireplaces, original floorboards and decorative cornicing really set these workspaces apart in a marketplace concentrated on industrial themed offices.

    At the top, a newer construction on the 4th and 5th floors provides a magnificent penthouse office of almost 2,300ft2. Converted from its original residential usage, this stunning duplex space is wonderfully light, with double-height walls of glass running around its perimeter and leading out to a private wraparound terrace with views over the City Fringe.

    Each office is air conditioned and has been given a sleek, contemporary treatment that combines a smart minimalism with some beautiful fittings, including futuristic led lighting suspend by minimal cabling to create the sense of light boxes floating overhead. A crisp pallet of white, black and natural wood runs throughout.

    Building amenities at 91-93 Great Eastern Street include a reception lobby, passenger lift, video intercom, shower facilities, communal cycle storage, and 24-hour access, while the Shoreditch Triangle location could hardly be better placed for enjoying a remarkable local scene of places to eat and drink as well as excellent transport connections at Old Street and Shoreditch High Street stations. 

    The refurbishment has been carried out by GMS Estates who were responsible for another notable refurbishment at nearby 35 Paul Street.  Their signature recipe of attention to detail and reviving as much of a building’s architectural heritage as possible gives their developments as distinctive quality and flavour.

    The Author

    Joshua Miller
    0207 101 2020
    07917 725 365
  12. Time to be smarter in the workplace

    22 February 2018
    With employee wellbeing, operational efficiency and carbon reduction very much on the radar of both landlords and occupiers, we are seeing the start of a revolution in monitoring the workplace and ‘smartening up’ buildings through an unprecedented level of data collection.
    The digital capabilities of buildings are increasing and, as they do so, are pushing landlords and tenants not only toward greater efficiency in the way space is occupied but, importantly, stepping up the environmental performance of the workplace. The idea of ‘smart buildings’ has been around for a while but to date this has focused primarily on regulating energy consumption. This now extends to factors that impact on occupiers, such as indoor air quality.
    As digital tech makes it possible to increase the densities of workplace use this has some challenging consequences. One recent study of an open-plan workplace used by 15 people found that by 2pm each day, the CO2 level was over 1,000 parts per million – more than double the natural level in the atmosphere. No wonder people can feel sleepy after lunch!

    For buildings to work smarter, monitoring becomes pivotal and the good news is that, as the cost of sensor technology drops, other applications for workplace environmental control become possible. Recent developments in the ‘Internet of Things’ (IoT) enables huge volumes of data to be collected from buildings.

    For properties that are not yet ‘smart’, fitting digital sensors will increasingly become a priority as cyber-physical integration enables improved control and management of resources.  At present, only a few occupiers have the resources to extract valuable business insights from the resultant Big Data. Co-operation between landlords and occupiers will therefore be essential, with occupiers exerting increasing pressure for this to be delivered. 

    As part of developing a new approach to building management, Colliers has recently launched a smart data analytics pilot at one of the major commercial assets we manage. More than 1,000 data points are being monitored and the aim is to identify opportunities to improve building efficiency and occupier comfort.

    The pilot building is a mixed-use block on London’s Regent Street, so it will give a cross-section of insights across the different uses to which space is put. Significant cost savings are expected to be realised (the target is cost neutrality in only months) whilst continuing to  improve occupier satisfaction and engagement.

    This new data-driven approach to building and facilities management looks set to deliver real financial benefits for landlords and occupiers whilst also giving people a more pleasant environment in which to live, work and play.

    Associate Director | Sustainability Services
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