Behind the scenes at Metropolis Property Research

This week we continue with the latest in an occasional series on the work of Metropolis Property Research, with a look at ‘no names’ policies.

In the early years of the millennium, companies refursing to give the name of the facilties or office manager dealing with a search or a relocation were very rare. The main sector for this refusal was pharmaceuticals in the age of protests over animal welfare. Later, secretive hedge funds followed suit.

After the 2008 economic crash there was a noticeable rise in companies refusing to put calls through to facilities manager, as supplier firms began to compete for a shrinking pool of work, leading to call numbers rising.

That was followed by a rise in the activities of Indian call centres that we all know today with highly speculative calls over PPI claims or ‘software problems’.

As a result the property and procurement staff at many firms put up their own ‘star wars defence shield’ to prevent incoming callers getting through. This, despite the fact that callers from lead providers such as Metropolis are only calling to offer to competive tenders for removal, office finding, refurbishment, furniture, cabling and related services! The result of such supplier calls is often lower relocation costs for the relocating or refurbishing company, but sadly all facilities department callers are lumped together..

The response from the research team at Metropolis has been to use market intelligence to give lead subscribers the edge. Metropolis has pledged to provide a ‘starting point’ name for every office mover story run, regardless of how high a wall built by the company ‘no names’ policy.

Methods include the obvious ones, such as combing the ‘About Us’ section of the office occupier’s website, to checking Linkedin records, followed by a call to the switchboard to check name and status armed with a ‘real name’. In addition and more subtely, Metropolis has a vast 100,000 record archive of previous property contacts and tens of thousands of companies, which allows for conversations that start with questions such as “you used to have a facilities manager a few years ago, named John Smith, does he still work there”?

Finally, if all else fails more imaginative approaches include calling to follow up on a previous conversation where the researcher “didn’t quite catch the name” or crosschecking press releases with the often eager to help marketing departments.

Office occupiers have their reasons for ‘no names’ policies, but equally it is the job of the diligent researcher to secure the best contact details to give Metropolis subscribers the edge in appointment making, tender submissions and sales.

Let the battle continue!

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Central London Office deals June 2015

Central London office lettings registered nearly 1.4m sq ft sq ft of transactions in June 2015, spread across 58 deals during the month. this is the highest monthly floorspace figure in 2015, so far.

The month was characterised by 20 deals over 20,000 sq ft, including Deutsche Bank at t10 Upper Bank Street; Google at Building S2 Kings Cross; DKLW at C:Space on City Road, EC1: Marshall Wace at Sloane Street and Saffery Champness at 71 Queen Victoria Street. Other large lettings included deals to QBE, HSBC and NYK.

Financial sectors topped the table of lettings by sector, helped by the Deutsche Bank and Marshall Wace deals, followed by business services and computer/IT. Under offers increased to over 4.3m sq ft – the highest level since the recession. Under offers include Ashurst and DLA Piper (both now signed)

By area, the City accounted for a little under half the deals (22) and 54pc of the floorspace let in the month. Office demand is calculated to be around 6m sq ft in the City and 3m sq ft in the West End. Availability fell slightly during June, but a number of new schemes are poised to come on line.

The volume of grade A (newly built or refurbished office space) let during the month increased to nearly 1m sq ft as transactions for newly developed or refurbished space rose again.

Metropolis is working on a new report on statistics on the hundreds of new requirements added to the database in the first half of 2015.

The Changing Professional Sector

CBRE’s recent report on the changing nature of the professional services (law firms, accountants, consultants etc) sector throws up a number of interesting points which are reflected in the research that Metropolis carries out with office tenants.

Firstly, cost as a relocation trigger. Professional services firms are using space more flexibly and efficiently in order to reduce costs. Metropolis has spoken to a number of companies that are using shared desk strategies and are looking to take short term serviced offices, instead of longer term leases. Recent examples include Pinsent Masons, Fieldfisher and CMS Cameron McKenna.

Secondly, staff attraction and retention. Companies are using attractive buildings, technology and aesthetics in order to attract and retain key staff. Previous Metropolis blogs have noted the increased willingness of professional firms to consider previously fringe locations, if staff can be housed in an attractive building.

Thirdly, building ‘wellness’ and the positive impact on staff retention. CBRE found that moving staff to a better location had positive impacts on productivity and company efficiency.  PwC’s refurbished Embankment Place is an example.

Fourthly, collaborative space in professional companies. Many accounting and management consulting groups require more dedicated collaborative space than existing locations can provide. In contrast, law firms require more quiet space for individual analysis and client contact. Deloitte recently took space at the Buckley Building, EC1 for this purpose. Metropolis has found professional companies increasingly opting for new space which can be designed to reflect their needs.

Fifthly, the implementation of technology straegies. The rapidly evolving use of technology, for example cloud strategies to allow for more mobile working, has led to re-configuration of office environments. KPMG recently spent £20m on an IT upgrade and Clifford Chance is innovating. Metropolis has found more companies inviting tenders for IT upgrades, amongst this sector, than many others.

Sixthly, outsourcing is becoming more important for cost control. Law firms in particular are making more use of external outsourcing or setting up their own support services operations in regional UK cities. a recent example is Hogan Lovells planning to double its lawyer count in its Birmingham. Metropolis has recently reported on a number of new offices in Manchester, Midlands, Scotland and Belfast.

The professional sector is also seeing a high number of mergers as a way of increasing competiveness and reducing cost. Metropolis reports a steady stream of mergers, which often lead to a requirement to bring offices under one roof. Recent examples are the Moore Stephens merger with Chantrey Vellacott and Charles Russell with Speechly Bircham. In addition in London, mid-level firms indicate that in the search for cost control further fringe locations are being considered such as Battersea, Shoreditch, Stratford and White City.

The outlook for professional services indicates further growth. During the past five years, professional services employment has increased by 20%, adding 42,500 new jobs in Central London according to government statistics forecasts suggest professional services sector will grow by 55,500 jobs between 2014 and 2019. There is 6.8m sq ft of professional sector breaks and expiries scheduled from 2015 to 2021, of which 4.9m sq ft is made up of legal firms. Metropilis’ own figures suggest over 100 companies with nearly 2m sq ft of outstanding London and UK office requirements looking for alternative office space over the next two years.