Lawyers racing for space

October 30, 2014 Leave a comment

The annual London law sector report from Jones Lang LaSalle (JLL) calculates 33 London law firms are looking for office space. This headline figure reinforces research this month by Metropolis which has reported 31 new London law firm requirements so far in 2014.

JLL report that although the cost of prime office space is rising to £60 per square foot, the increasing costs and squeeze on available space that the total amount of space from all current London law sector requirements is 871,000 sq ft, of which 372,500 is under offer.

In the first three quarters of 2014 have been 14 transactions involving law firms, equating to 400,000 sq ft which is a slight drop on the same time last year. Firms agreeing deals recently have included Macfarlanes, Mishcon de Reya, Howard Kennedy, Davis Polk and Ropes & Gray.

JLL have identified a trend for companies to look further ahead. Traditionally law firms would start planning 2-3 years before the end of a lease, but because of an impending development squeeze in London, this could rise to as much as five years. The longer time periods also enable firms to influence fit-out.

Looking ahead, Metropolis is discussing future lease expiries with firms such as Dechert (60,000 sq ft), Cleary Gottlieb Steen & Hamilton (60,000 sq ft), Plexus Law (30,000 sq ft) and Mills & Reeve (10,000 sq ft) which could prompt further searches.

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Metropolis Office Requirements – Q3 2014

October 30, 2014 Leave a comment

9.5m sq ft of demand

Our team here at Metropolis researched over 370 UK company office requirements in Q3 2014, representing 9.5m sq ft of office demand.

6m sq ft of this demand was for space in Greater London and 4.9m sq ft was demand for space in central London.

Demand for City of London space continued to be strong during Q3, with 2.4m sq ft required in over 60 planned relocations. Three of the top five largest requirements in the City were searches by technology and media companies. EC2 demand made up 37.5% of the total space required.

1.4m sq ft of demand was identified in the West End of London, split equally between requirements for space in London SW1 and W1. Again three of the top five largest requirements were searches by technology and media companies, with two significant searches by financial service sector companies identified.

Mid Town office demand was largely focused on London WC2, with 100,000 sq ft of the 300,000 sq ft required in this postcode attributed to media sector requirements.

Just over 0.6m sq ft of demand was researched in London’s Southbank, 200,000 sq ft of which was triggered by an energy company’s requirement for additional space in the area.

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Similar to H1 results, the Banking & Finance sector is leading the demand for new UK offices, with 1.4m sq ft of requirements in the UK, just over 0.4m sq ft of which is sought in the City of London.

Requirements from media sector companies represented just over 1m sq ft of demand, a 300,000 sq ft requirement in London W1 significantly boosting this figure. Technology & Telecom sector requirements came a close third with 0.9m sq ft of demand. The law sector accounted for 0.8m sq ft of demand and the insurance sector 0.5m sq ft.

 

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Simon Sluszny October 2014

Copyright Metropolis Property Research Ltd

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Thames Valley Demand Up

October 24, 2014 Leave a comment

A recent report from JLL concluded that while office demand in the Thames Valley has increased by 60% during 2014; the volume of actual office deals completed has remained subdued, suggesting that there is likely to be a surge of deals in late 2014 and early 2015.

While some 3m sq ft of office space was let in 2013, only a modest 800,000 sq ft has been let so far in the first three quarters of 2014. Only one deal over 50,000 sq ft was signed VM Ware’s acquisition in Staines (62,000 sq ft). Other major deals included Avnet moving to The Capitol Building, Bracknell (42,500 sq ft), Pernod Ricard taking space at 12 Chiswick Park (42,000 sq ft) and UK TV’s relocation 10 Hammersmith Grove (32,500 sq ft).

JLL say that with over 60% of current requirements in the area coming from US companies, that there is a trend for real estate decisions by US companies to be taken at the end of the year, suggesting a clutch of deals to come. JLL is now forecasting nearly 2m sq ft of office deals in the Thames Valley in the final quarter of the year. Metropolis’ own database of Thames Valley searches reveals about 50 outstanding, including 40 new ones added this year.

There is some 4.8m sq ft of identified office demand in the Thames Valley including large companies searching such as Pepsi, Boden, Ocado and Amadeus. There is also a solid batch of mid size requirements driven by forthcoming lease expiries and expansion plans.

Hammersmith, Chiswick and Bracknell are currently the most popular areas for office deals so far in 2014, under JLL’s definition of Thames Valley. There is around 1.6m sq ft of new office space under construction in the wider area Western corridor area. The area is due to deliver schemes in Chiswick, Slough and Reading, where four schemes are due to deliver nearly 400,000 sq ft, which could prompt some high profile moves to the town.

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The Lighter Side – Part 2

October 17, 2014 Leave a comment

Amongst the hundreds of phone calls and meticulous research work, tracking down around 120 UK firms with plans to move each week, there are some lighter sides to the job of putting together our brand of intelligence-led property business leads every 7 days:

Catch 22: We called one large London company and spoke to the head of operations about a major requirement the firm was rumoured to have: he said he would have no idea who would be dealing with it, we asked to be put through to facilities, he said they have no facilities department, we asked to go to Operations, he said he was Operations, but didn’t deal with “those Operations”

Sometimes you can’t fault companies for their optimism. Metropolis spoke to the owner of one central London building who confirmed that the building would be demolished the following year. Metropolis then spoke to 8 of the 9 tenants who confirmed they were searching or about to search for alternative premises. Initially the junior staff and the 9th firm accepted they would be moving, but despite repeated attempts Metropolis was unable to speak to the office manager. The firm, based on the 2nd floor of the condemned building, was eventually run as a lead, whereupon the evasive office manager complained that he had no had no intention of moving and would renew his lease regardless of the planned demolition.

Then there are the firms which list their address on the their website and when we call them, they say: “oh we moved out of that address months ago”. There is at that point a temptation to then ask if they hold many meetings on the premises and if so, have they noticed an unexplained fall of in the number of attendees?…

One company asked if the company could get someone to call the researcher back. The researcher replied that would be fine and to ask for ‘Sam’. “How do you spell that?” was the follow up question… ‘S’…’A’.. Reasonable question.

One slightly depressing conversation ran along the lines of: Researcher: “I see your lease is due to expire in June 2015, do you have any plans to look at other properties?” Tenant: “No plans at all”. Researcher “Do you think that you’ll negotiate a refurbishment from your landlord as part of the deal to stay?”. Tenant: “Oh no, we wouldn’t want to put him to any trouble..”

When asking one company: who deals with its office, one receptionist said “oh thats Mr Briggs, he’s the caretaker and he changes the loo rolls and everything.” Ok let me put that another way..

When asking when a company is planning to relocate it is surprising how many tenants do not have any idea. One helpfully said “at some point in the future”

Temporary staff are often poorly briefed by the company for whom they are working. Researchers will outline why they are calling and ask to speak to the office manager. The Temp will say “do you have a name?” The researcher will say “I was hoping you could tell me.” To which the temp will say “I don’t know anyone’s names or job titles here I’m just the temp”. I’m guessing that the company’s phones were unusually quiet that morning.

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London Deals Hit New Heights

October 10, 2014 Leave a comment

Central London office lettings in September 2014 reached 1.3m sq ft in 53 medium or large deals, representing a bounce-back after the traditionally slower August deals month.

The yearly total has reached 11m sq ft already and a 15m sq ft total for 2014 is not out of the question. September was characterised by large lettings to Amazon, Parliamentary Standards Authority and Jupiter Asset Management amongst others.

The retail, professional and financial sectors topped the table of lettings by sector. By area, the City accounted for 74pc of the deals, helped by the large Amazon pre-let. Victoria was boosted by a number of large deals.

The volume of grade A (newly built or refurbished office space) let during the month topped 800,000 sq ft and matches the momentum of new space lettings from earlier in the year.

A survey out this week from Knight Frank reveals that demand from companies looking for London offices has reached a 14 year high, with many requirements from non-traditional sectors. To underline this there are now over 750 active London requirements on the Metropolis database and a further 2-3m sq ft of potential requirements in the pipeline.

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Metropolis Researcher Vacancy

October 9, 2014 1 Comment

Metropolis has a vacancy for a part-time property researcher.

Duties would include researching 20-30 good quality office relocations each week by speaking to UK office tenants about their future plans and inputting information onto a web-based database. The researcher would work from home. Online training will be given.

Candidates require experience of telephone research or telemarketing and some knowledge of the office market.

For further details please post a comment with your email address.

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Requirements in Belfast

October 2, 2014 Leave a comment

A recent report by CBRE suggested that a rise in the number of office deals in Belfast is approaching, as a number of occupiers look to secure more space.

Belfast office lettings in the first half of 2014 barely reached 100,000 sq ft in just over 20 transactions. This total was less than half the 200,000 sq ft of office deals that were signed in the second half of 2013 in the city. Recent lettings have included office space being taken by Deloitte, Cowen Financial, Scottish and Southern Energy, Grant Thornton and Herbert Smith Freehills. Meanwhile the British Council and Pharmalink Consulting have agreed moves to ‘The Boat’ office building.

However, news of recent job creation by Alexander Mann, PricewaterhouseCoopers, Options, WAVTEQ, CVS Caremark and Spence and Partners, amongst others suggests more demand for new and expanded office space to come. Metropolis has spoken to these companies and a raft of plans to take more office space in the city have been revealed (details on our database).

There are high profile searches ongoing from accountancy firms EY and Deloitte who both require up to 60,000 sq ft of office space; as well as office space requirements from companies such as Concentrix, Capita and Proofpoint. There are also a lot of sub-10,000 sq ft potential movers, as well as continuing investment from a number of US-based companies and a number of UK companies looking to set up lower cost regional operations.

The largest office scheme under construction is the 68,000 sq ft speculative City Quays scheme; while the 150,000 sq ft Olympic Building has gained consent and the 124,000 sq ft City Quays 2 building is at application stage.

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