Commercial Blog November 2018 - Colliers International | London

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  1. November 2018

  2. Loving the gym

    19 November 2018
    The prospect of a trip to the gym will mean different things to different people but you wouldn’t have imagined that romance is one of things that springs to mind. However, in a survey of 3,000 gym users that we conducted for our latest review of the London gym market, an amazing 75% said that they’d go to the gym on a date.
    The fact that so many people could see the gym as the place for a romantic encounter perhaps speaks volumes for how embedded the ‘keep fit’ process is in so many people’s lives.

    The London health and fitness scene continues to boom, but there is an increasing polarisation in the market between the luxury and studio gym sectors and the budget offers. The premium market accounts for 18% of clubs but represents more than half of all floor space because of its need to accommodate specialist areas such as altitude conditioned studios, o-zone treated pools and bespoke training equipment. 

    While the sector was once dominated by mid-market branded groups such as Fitness First and LA Fitness, the mid-market’s stronghold has weakened in the face of new niche offers like 1Rebel, F45, Barry’s Bootcamp and the rapid growth of low-cost formats such as Pure Gym. As a result of this diversification, the mid-market sector now only represents 19% of all London clubs while studio gyms make up 41% of clubs across the capital. 

    Among the newcomers to the scene is the American brand, Peloton. It combines cycling studios with a retail arm where customers can purchase a bespoke bike with an inbuilt 22-inch HD screen onto which a range of immersive cycling classes that can be streamed to you in the (dis)comfort of your own home.

    Meanwhile rents are also getting suitably pumped up. Average studio gym rents are around £32.50 per sq ft – a very decent return to landlords for what is often space that would struggle to attract an alternative occupier.

    Given the younger generation’s focus on healthier lifestyles plus the growing importance of wellbeing, the London gym sector looks like it will continue in good shape for some time to come.

    Author: 

    Ross Kirton
    Head of UK leisure agency,
  3. No more room at The Loom (for now!)

    19 November 2018
    Helical's magnificent reworking of a Victorian wool warehouse in Whitechapel is now fully let.
    This remarkable slice of industrial heritage on Gower’s Walk was given a stunning refurbishment to a design by Duggan Morris architects, resulting in several prestigious and well-respected design and construction awards:  a RIBA NationalAward, the AJ Retrofit Award for Best Listed Building and a BRICK Award for Best Refurbishment Project.

    The Loom has drawn new and established businesses across a multitude of sectors, from fashion and finance to charities and creative agencies, all enchanted by the building's beauty, the spaces within and the value for money of an office space in Whitechapel. Not to mention, of course, the vibrant social and cultural scene.

    Among the latest new occupants are Dutch fashion brand G-Star, moving from their previous office in Bermondsey, and INgrooves, an independent music producer relocating from the Shoreditch Triangle.

    Alongside these new tenancies are a number of moves within The Loom including Tribe, an international creative experience agency with offices in New York and Los Angeles; the charity TBF (the public transport benevolent fund); video marketing agency Vidsy, and the seemingly ever-expanding mortgage market disruptor, Habito, taking yet more space in what is their third expansion since arriving at the building.

    It's the first time in its history as offices that the The Loom has been fully let. The original conversion back in the 1980s delivered fairly rudimentary workspaces in what was very much a tertiary location; a far cry from the Whitechapel of today.

    That companies are electing to remain at The Loom after a period in occupation and as their businesses evolve is testament to the quality, atmosphere and design that's now on offer coupled with Helical’s policy of flexible leasing. It's also the best indication we can imagine of a building delivering on its promise.

    And despite its fully let status there is still plenty to talk about at The Loom with a new fully fitted turnkey solution being offered in 2019 and a selection of units becoming available. If you'd like to find out if The Loom is the right next home for your business, feel free to get in touch. 

    The Author

    Elliott Stern
    020 7101 2020
    07834 918 700
    Elliott.Stern@colliers.com
  4. First gin shop to open in London for 200 years

    15 November 2018
    The Crown Estate, advised by Colliers International Central London Restaurants team, has let a shop in the iconic Princes Arcade to Sipsmith Gin.
    The space will become home to The Sipsmith Gin Shop – the first dedicated gin shop to open in London for over 200 years. The boutique will offer a range of exclusive Sipsmith products, including the personalised Gin Stocking; unique experiences and events, such as Hot Gin masterclasses; and of course an in-house Gin Bar.

    Three other brands - Sir Plus, Anatome and Gizelle Renee – have also recently signed to the destination which connects Piccadilly and Jermyn Street via a covered arcade.

    Oliver Smith, Head of St James’s at The Crown Estate, said: “Together, these new brands represent the continued evolution of Princes Arcade and the St James’s area. Each of them signify craftsmanship, quality and style, and they combine this with a uniquely contemporary focus. It is particularly exciting when brands come to us as pop-ups and often become permanent residents in the arcade. This speaks to the quality of the destination and the positive impact made by its reinvigoration.”

    The brands have chosen Princes Arcade following its modernisation and refurbishment, with The Crown Estate investing in the Regency-era shopping arcade to transform it for contemporary brands and shoppers. Princes Arcade will continue to offer permanent pop-up space and test bed for new brands, enabling them to experiment with new formats and reach new audiences.

    Josh Leon, Head of Central London Restaurants, Colliers International, said: “London has a fascinating relationship with the traditional Gin Shop going back to the 18th Century. This version, reimagined for the modern day, comes at the perfect time in the run-up to Christmas. Sipsmith is a distinctive and formidable brand that has many shared values with the Crown Estate, and is exactly the kind of occupier we are looking to collaborate with in St James’s.”
  5. Scrubbing up well: a thoroughly modern makeover at Bath Place

    15 November 2018
    It’s not often that we enthuse about the virtues of post-modern 1980s business parks, but a quite remarkable transformation has been achieved at this newly refurbished and self-contained office at Bath Place in Shoreditch.
    On the outside the archetypal allusions to classic architecture are apparent with clear influences from the Georgian era and 1930s: tall arched sashes; a Juliet balcony with French doors; wide art-deco factory style windows; a stone colonnade. 

    But what sounds like an odd and somewhat random combination on paper has been embraced and utilised to remarkable effect, delivering not only a modern workspace, but also a surprising one. 

    It’s a straight-up 21st century reinterpretation that sits comfortably alongside the neighbourhood’s many new buildings and warehouse conversions, but exhibits a particular character that stands apart from the crowd.

    The office is arranged over 4 storeys, with 623ft2 on the ground floor and a roughly even split of around 950ft2 to each of the upper levels, giving a total floor area of 3454ft2. The general impression is that of a contemporary commercial take on a classic 19th century townhouse.

    Specification includes slender strips of led lighting, air conditioning and exposed services in galvanised conduit all suspended from the ceilings; waist height perimeter trunking and a combination of engineered oak and polished concrete floors.

    As well as exploiting a fairly short heritage and working with the original architecture, the refurbishment revealed a delightful discovery on the ground floor: a barrel vaulted concrete soffit to match anything at the Barbican or South Bank. 

    Set on bustling Rivington Street, Bath Place sits almost dead centre in what was the original Shoreditch Triangle before it expanded east to Shoreditch High Street. The area is alive with creative industries and chock full of some of the best cafes, bars and restaurants in London.

    Local transport includes the Overground at Shoreditch High Street, Underground and National Rail at Old Street and numerous buses passing along the nearby thoroughfares. Liverpool Street station is about half a mile away and will soon be joined by the new Elizabeth Line when first phase of Crossrail completes at the end of this year…but if you or your visitors still want to drive you get secure off-road, private parking for at least 2 cars right outside you own front door.

    The Author

    Joshua Miller
    0207 101 2020
    07917 725 365
    Joshua.Miller@colliers.com
  6. One down and two to go at The Johnson Building

    13 November 2018
    After the recent merger of two of the UK’s longest established housing associations, the newly formed Metropolitan Thames Valley (MTVH) has recently moved into new offices at The Johnson Building, a development by Derwent London in Hatton Garden/Clerkenwell.
    A partnership of Metropolitan Housing Trust and Thames Valley Housing Association, MTVH was seeking a central head office and to acquire a space that reflected the enlarged and higher profile of the amalgamated organisations.

    It was in the 1950s – against the backdrop of post-war London’s labour shortage, the Windrush generation and a lack of secure tenancies – that MTVH’s legacy was born. Both of the early associations set out to provide safer and more affordable homes in the inner cities and today the group owns, manages or administers around 57,000 homes across London, the South East, East Midlands and the East of England.

    The new office of MTVH is a single storey second floor unit of 22,135ft2; a large open space with huge banks of windows across the front and rear of this sensitively refurbished 1930s structure. Centered around a spacious, full height atrium, The Johnson Building won the RIBA Award for Architecture in 2008 and was the first large-scale scheme of the esteemed architectural practice Alford Hall Monaghan Morris. 

    The architects returned to The Johnson Building in 2017 to refurbish four lower floors– including the atrium and publicly accessible café – and it’s within that new refurbishment we are offering a pair of adjoining triplex units of 20,000ft2 and 16,000ft2. Both are self-contained and have their own private entrances, one at 79 Hatton Garden and the other in The Courtyard at 6 St Cross Street. There is also the opportunity to combine both units to create a single triplex unit of 36,000ft2

    Each unit is arranged over the lower ground, ground and first floors and is characterised by interconnecting spaces with mezzanines, floating staircases, double height voids and huge banks of glass. Specification and amenities are a typically premium offering from Derwent London and include multiple cycle bays, shower facilities, exposed concrete soffits and beams, oxidised iron columns, air conditioning, a WiredScore certification of Gold and a 1:10 occupational density throughout.

    The Johnson Building’s prominent location on Hatton Garden puts it at the centre of a vibrant corner of Clerkenwell where the City Fringe and MidTown meet. Leather Lane is just one street west with a daily street food market that’s a firm favourite with locals, while one street east is the bustle of Farringdon Road, Cowcross Street and Smithfield Market.

    The Author

    Richard Silver
    020 7101 2020
    07980 205 293
    Richard.Silver@colliers.com
  7. A new face for Farringdon

    12 November 2018
    The refurbishment of Link House on Cowcross Street in Farringdon is nearing the finish line, with practical completion anticipated in Spring 2019.
    This futuristic redevelopment of an existing office building sees the retention of the original concrete frame, but a complete remodelling of the interior along with a brand new facade and improved connectivity between the street and rear courtyard.

    A project by DAO Estates, the refurbishment of Link House has been carried out to a design by Gibson Thornley Architects to provide high quality contemporary offices to match the exacting standards of a modern London business..

    On offer are five premium workspaces: a self-contained Ground & Lower Ground office/showroom suite of 2985ft² ; three single storey units of 1765ft² each from floors 1 to 3; and a 4th floor office of 1765ft² with a newly constructed 710ft² 5th floor that benefits from a private roof terrace.

    The specification reads like a wish list from a design conscious creative enterprise: 2.7m feeling heights to most floors; exposed air conditioning & services; modern suspended lighting and timber flooring. Building amenities include a new passenger lift, cycle storage and shower facilities.

    But it's the optimisation of natural light that’s at the heart of the scheme, with the new facade on Cowcross Street comprising three bays of floor-to-ceiling windows arranged in a rational grid and recessed into grey mottled brickwork. It's an arresting and archetypal 21st century façade with its own unique slant.

    Located in the Charterhouse Square Conservation Area, the building is supremely well placed to take full advantage of all that Farringdon has to offer. Just moments from Smithfield Market, soon to be the home of the relocated Museum of London, Link House is on the most vibrant street in the neighbourhood, alive with restaurants, bars and commerce.

    Cowcross Street is also the location of Farringdon Station where the new Elizabeth Line will stop when the Crossrail project completes at the end of this year, turning Farringdon into a major London interchange where tube, train and Crossrail meet and suddenly putting Heathrow Airport, the West End and Canary Wharf on a direct rail link with the neighbourhood, increasing the areas profile and business yet further.

    The Author

    Alexander Howarth
    0207 871 7430
    0750 000 7571
    alexander.howarth@colliers.com
  8. The rise and future of flexible workspace

    5 November 2018
    At the recent GCUC event in London, the UK’s first co-working conference, Colliers was asked to give a short presentation about the future of co-working in London.
    Historically, the conventional landlord-tenant model has been the driver of London’s commercial market, with the only previous alternative a collection of uninspiring serviced offices, generally involving blue carpet and unfriendly lighting. But the explosion of SMEs in the creative and tech sectors requiring agility with their dynamic business plans, coupled with corporates implementing flexible working policies, has caused a shift in demand towards design-led flexible office space that is as disruptive as the enterprises that seek it.

    To accommodate this demand, flexible workspace operators have grown exponentially, with an uptake in excess of 130% since 2009 that currently accounts for around 11 million sq ft of occupied space in central London. This accounts for a market share of roughly 5% that is predicted to double by the end of 2020, and potentially reach 30% occupancy by 2030.

    This activity is both underpinning the London market and forcing a major rethink among landlords as demand from both SMEs and corporate occupiers hinges ever more on flexibility, simplicity and minimal capital outlay. A change of IFRS16 regulations from January 2019 will mean any property liability over 12 months will sit on the P&L of a business, affecting both its valuation and cash flow.

    As a response, British Land, Grosvenor and LandSec are all developing their own flexible workspace initiatives, and landlords are delivering fitted offices on shorter form leases that lower the barrier to entry for occupiers, reduce void periods and achieve higher ERVs. 

    Workspace as a service is becoming more prevalent, with the likes of Knotel, Powered by We (WeWork) and BESpoke all providing outsourced and fully fitted property solutions that enable companies to focus on running and growing their core business. Co-working is now an alluring prospect and often enhanced with many workplace benefits including cafés, gyms and wellness rooms.

    The rise of co-working and flexible workspace has also brought good news for occupiers taking longer leases, with more choice than ever before, increased flexibility and reductions in initial capital outlay. 

    What the future looks like remains to be seen, but one thing is certain: flexible workspace is here to stay!

      



    The Author

    Mark Bott
    0207 101 2020
    07879 890 115
    Mark.Bott@colliers.com
  9. The big breakfast: 100 agents attend morning launch of 6 Lloyds Avenue

    2 November 2018
    It was rave reviews all round at the industry launch of 6 Lloyds Avenue EC3 on October 11th: around 100 agents came from 7:30am for coffee, croissants and a look around the offices at this handsome and beautifully restored Grade II listed building just around the corner from Leadenhall Market.
    Our clients have recently undertaken a comprehensive internal refurbishment that was met with plenty of positive comments from numerous agents present, many having seen the building before when it was used for serviced office space. Much of the original fabric has now been exposed and renovated with steel columns and beams, restored timber windows and cast iron fireplaces helping to create hugely characterful and wonderfully bright workspaces.

    Just 2 minute’s walk from Fenchurch Street station, 6 Lloyds Avenue has been transformed into a longer term incubator for a range of fast growing companies, with around 35,000ft2 of small office units in a variety of sizes from 500-1800ft2. The high quality specification includes solid oak floors, hi-tech Fagerhult lighting, new air conditioning and preinstalled hi speed Internet, while building amenities include a commissionaire, secure cycle storage, 24-hour access and refurbished reception, showers and male/female WCs.

    The breakfast event was designed specifically for tenant representation agents and to provide them with a physical experience of the building to discuss with current and future clients. Tours of three available units were given by the Colliers City and City Fringe teams along with joint agents The Workplace Company.  

    The launch was to highlight the remaining units to agents and to celebrate the building’ smarket reaction following the refurbishment. Just 10 units now remain and the mix of tenants confirms the widening appeal of EC3 beyond its traditional roots in the insurance sector.

    Among the companies recently taking space are Rusupo, a development, construction and project management consultancy; Acquinex, a specialist managing general insurance agency; and Regulatory Data Crops, a tech firm focused on preventing criminal cyber activity.

    If you’d like your business to join the dynamic firms moving to 6 Lloyds Avenue, or to discuss anything more about the building, please contact Colliers City Agency on 020 7487 1900 or Colliers City Fringe on 020 7101 2020. 





    The Author

    Natalie Lelliott
    02074871853
    07702975683
    Natalie.Lelliott@colliers.com
  10. On reconnaissance, in America Part two: San Francisco giants

    1 November 2018
    If the creative space scene in Los Angeles is about a city telling us what it can do, then surely San Francisco and Silicon Valley are about showing the world exactly how it’s done. And our visit revealed just how astonishingly massive the tech sector is in California.
    The sheer scale of headquarters and ideologies is something we found equally arresting and fascinating: from towering skyscrapers to sprawling campuses, everything is enormous. And that extends to contrast in markets.

    In the Silicon Valley area enough empty land exists for organisations to effectively create their own world, unbound by the inconveniences of towns, cities and street plans. In downtown San Francisco, even the idea of vacant space seems but a quaint notion. And this is where the market, from a European perspective at least, seems completely on its head.

    On this side of the Atlantic it is landlords and investors who do the land banking, accumulating assets for redevelopment, long-term investment or compiling portfolios for disposal. In short, for revenue. But such is the competition for offices in downtown San Francisco that the prospect of being landlocked is a very real threat, meaning occupiers must take excess space to secure their future growth. Relocating thousands of people when there is literally nowhere to go is a highly disruptive and hugely costly peril. 

    A case in point is Linked In. In 2016 the company moved into Tishman Speyer’s new Salesforce Tower on 2nd Street, the tallest building west of Chicago. But despite taking a lease across the 26 floors of 450,000 ft2,  LinkedIn left a third of the space undecorated and unoccupied until their expansion required it. 

    (The Colliers Global Occupiers Team explored these unfinished upper floors as part of the annual Occupier Advisors event, involving 100 delegates from Colliers offices in Canada, USA, Europe, and India.)

    Further south along the coast in the Mission Bay district, more global players are taking large spaces to secure a future: Dropbox occupies c. 750,000ft2 across three towers; Adobe 311,000ft2 across two buildings; and Uber has recently committed to a 423,000ft2 campus. Facebook, meanwhile, has just signed the largest ever office lease agreed in San Francisco, taking the entire 755,000ft2 of Park Tower at Transbay.

    Against this backdrop, it is easy to understand why Silicon Valley came about when considering the amount of people the biggest tech firms employ as well as the space and infrastructure they require. Our excursion showed us just how little need there is for expanding into the sky or squeezing into tight spaces, when huge swathes of Californian landscape swallow even the largest architectural behemoth. 

    So far over 77,000,000ft2 has been built, with Apple’s vast campus, or Park, in Cupertino grabbing most of the headlines. Sitting in 150 acres, the perfectly circular building extends to over 2,800,000ft2 and accommodates more than 12,000 employees, yet rises just four storeys from the ground. The 14,000 parking spaces are quite a contrast to the cycling bay provision in London office developments. 

    That about brings us to the end our tour. Visiting the epicentre of the global tech scene was an eye-opening and truly immersive experience. There was so much to take in – impossible to capture fully in an article such as this – but also much to take away as useful insights and advice for our London clients.







    The Author

    Sophie Higgins
    020 7101 2020
    07786 510 974
    Sophie.Higgins@colliers.com
  11. October 2018

  12. 55 Wells Street

    Capital interest: European investment firm acquires second London building

    31 October 2018
    As a sign that foreign investment continues unabated in the West End commercial investment market, Colliers has just assisted Antirion in its acquisition of a newly developed 39,000ft2 building in the heart of Fitzrovia.
    Founded in 2009, Antirion is a Milan-based independent asset manager. The firm has current assets under management amounting to approximately € 2.3bn, mainly located in Italy but with a growing presence outside its home market.

    Just behind the Sanderson Hotel, 55 Wells Street is a recent project of Great Portland Estates and was completed in 2017 to a design by the award winning architects Buckley Grey Yeoman. There are eight storeys in all with six floors of office space, a ground floor restaurant unit and D1 accommodation on the lower ground floor. 

    The high quality of the development is met by the strong covenants of the tenants, not least of whom Yotam Ottolenghi whose new flagship eaterie ROVI occupies the ground floor restaurant unit. The offices floors are let to Williams Lea and Synova Capital.

    The acquisition of 55 Wells Street was agreed at £65.45m, which represents a net initial yield of 4%. The building is Antirion’s 2nd purchase in London after the establishment of a joint venture with Brookfield in early 2017 to acquire Principal Place, the UK headquarters of Amazon, adjacent to Liverpool Street and Broadgate in the City. 

    Great Portland Estates have developed 55 Wells Street to an exceptional standard, making an excellent addition to Antirion's portfolio: a truly first class office building in a prestigious, established and fast transforming London location with an exciting future.

    The Author

    Rob Hayes
    020 7487 1766
    Rob.Hayes@colliers.com
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