City scheme tipped

Helical Bar, the developer, has gained consent to redevelop a 2.3 acre site of former hospital buildings on Little Britain and Bartholomew Close in London, EC1 called ‘Barts Square’ and is expected to start work on the scheme in 2014.

The project is a joint venture with US firm Baupost and will include 21,367 sq m (230,000 sq ft) of office space across two buildings, 215 apartments and 2,137 sq m (23,000 sq ft) of retail/restaurant space. The designers are Sheppard Robson and Piercy Conner Architects. The project manager is GVA Second London Wall; EC Harris is cost consultant and Waterman is structural engineer.

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Metropolis 2013 Research Review

REQUIREMENTS BOOST

The Metropolis research team produced a total of 6,537 relocation, construction and refurbishment leads in 2013. Over 26% of these were active UK office space requirements, in line with 2012 research results. 1,745 office requirements were confirmed in total, with 1,056 new office requirements uncovered by our research, up 6% on 2012’s total and 19% on 2011’s.New requirements accounted for over 22m sq ft of UK office demand.

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61% of Metropolis leads were projects located in the South of the UK (63% in 2012, 61% in 2011, 2010 and 62% in 2009), with 39% of lead projects located in Wales, the Midlands, North, Scotland and Northern Ireland. Greater London projects represented 45% of the 2013 lead total, a close match to the 2012 proportion (46%).  

Leads in Scotland saw a 120% increase when compared to 2012’s lead total, boosted in part by energy sector requirements in Aberdeen and an upturn in the Glasgow office market. West Midlands lead numbers saw an increase for the second year running, with several new Birmingham office requirements emerging from the law and insurance sectors. Results for other Northern  regions were broadly in line with expectations, with North West lead numbers slightly down on last year’s result but still up on 2011, 2010 and 2009’s totals.

London and South East lead numbers were very similar to 2012’s totals.  In terms of Greater London office requirements, the top 5 most sought after postcodes areas by demand were:  EC2 (3.6m sq ft),  W1 (3.2m sq ft),  EC4 (3m sq ft), SE1 (2.7m sq ft) and EC3 (2m sq ft).

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UK LEADS BY PROJECT SIZE – 53% of Metropolis leads in 2013  reported on projects over 10,000 sq ft. 46% of leads were made up of projects between 5,000 sq ft and 30,000 sq ft. 73% of leads covered projects over 5,000 sq ft.  The increase in lead projects between 2,000 sq ft and 4,999 sq ft can be attributed to the number of SME’s facing 2013 and 2014 lease ends and those launching searches for additional and larger space as market conditions improve.

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TOP TEN BUSINESS SECTORS – The Technology & Telecoms sector overtook Banking & Finance in 2013 as the strongest UK business sector in terms of relocation and refurbishment projects.   Lead numbers within this sector have grown year on year since 2009, making up 11% of all leads researched last year. If coupled with the Media sector under the popular designation of ‘TMT’, these two sectors were responsible for 32% of the top ten. The largest new technology office requirements were centered on London and the Thames Valley, with a few notable new searches emerging in Cambridge and Edinburgh.

The Banking & Finance sector was pushed into second place last year, but still had a strong showing, on par with 2012 lead levels. Relocation and refurbishment leads on hedge funds and investment firms made up 33% of the sector total. 

Law firm leads saw a 23.5% increase when compared to 2012 lead numbers and we expect increased activity in this sector during 2014. The recently published Metropolis Law Report confirms we are tracking 140 active  law firm office requirements totaling 2.6m sq ft plus over 100 law firms with lease expiries or breaks coming up between 2014 and 2016.

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(C) Metropolis Property Research Ltd 2014

The latest on London Office Demand

London office lettings in December 2013 reached an impressive 1.5m sq ft – the highest monthly total of the year. In fact, 2013 ended with a bang as large transactions were signed in the last few days of the year involving Schroders, Hachette and Capita. There were 72 deals over 5,000 sq ft, which was also a monthly record for 2013.

The annual total fell just short of 12.2m sq ft in nearly 600 deals over 5,000 sq ft, which represents a huge 37% increase on the 8.9m sq ft of London lettings in 2012.

The good news for the fit-out industry is that over 5 million sq ft of the 12.2m sq ft transacted, was in grade A space, either recently built or refurbished, which represents a 72% increase from the 2.9m sq ft of top grade space let in 2012. A stream of lettings at schemes such as 20 Fenchurch Street, Leadenhall Building and The Walbrook helped to boost the total

Million sq ft
Grade A 5.52
Grade B 6.68

The lettings total grew every quarter, finishing on 3.5m sq ft in Q4

Million sq ft
Q1 2.62
Q2 3
Q3 3.1
Q4 3.5

The geography of the London office lettings in 2013 shows the dominance of the City of London and the relative lack of office availability in the West End. The table below also shows that Midtown and Southbank are capturing a high proportion of deals, with a number of schemes such as the Shard expected to announce more deals in 2014.

Million sq ft
City 5.10
Midtown 1.70
West End fringe 1.67
Southbank 1.30
Docklands 0.73
Victoria 0.54
North Oxford St 0.42
Mayfair 0.32
WC2 0.23
Soho 0.11
St James 0.08

In terms of the split by sector, the TMT (technology, media and telecom) sectors continued to dominate, followed by a recovering financial services sector, professional and business services.

Sector share by %

TMT 30.00
Financial Services 20.00
Professional 14.00
Business Services 11.00
Insurance 8.00
Energy 5.00
Recruitment 4.00
Representative 3.00
Other 3.00
Public Sector 2.00

The prospects for 2014 look good, with over 600 firms identified looking for office space in central London and a further 500 due to make decisions over approaching lease expiries this year.

Metropolis in 2014

A happy and prosperous 2014 to all Metropolis Blog readers.

This year we plan to bring you an even bigger range of comment and analysis of the UK office demand and supply market on a monthly basis. Features will include focus on various UK regional office markets, trends in the London office market and inside commentary on some of the recent office market reports released by various market commentators.

All articles will feature examples from Metropolis’ huge database of forthcoming office relocation stories, covering small 15 person moves upto the largest 100,000 sq ft requirements.

Sit tight and enjoy the ride!