Patchy Leeds Demand

Demand for office space in Leeds for the first half of 2017 remains similar to the 12 months that preceded it, but trailed the five year average by 18 per cent, according to new research.

The CBRE Leeds office marketview report found that office take-up in the city was 237,165 sq ft in the first six months of 2017.

There were three lettings over 20,000 sq ft; a 46,058 sq ft letting to Burberry at 6 Queen Street, 25,968 sq ft to Willis Towers Watson at 5 Wellington Place and 22,441 sq ft to BW Legal at 1 Apex View.

The majority of take-up in the city was in the sub 5,000 sq ft size band.

Despite the lower level of enquiries in all size ranges, annual take-up is still likely to be a record for Leeds city centre if the pre-let of 350,000 – 380,000 sq ft at Wellington Place to the Government Property Unit goes ahead.

Looking to the second half of the year, demand is expected to be patchy for at least another quarter.

Metropolis has run nearly 40 new requirements for Leeds office space this year, however most searches are small.

3 Wellington Place (109,000 sq ft) is the only new development completing within the next 12 months. Refurbishments available this year, include ‘Platform’ (120,000 sq ft) and 7 Park Row (40,000 sq ft),
which will help the dwindling Grade A market.

Office Moves Planned in July

Metropolis ran 580 business leads on ‘office movers’ in the month of July 2017. If all reported moves were added together the total would exceed 16 million sq ft of office searches and transactions, researched by Metropolis’ unique market led intelligence research team. London was the largest region with 247 leads during month, but there were also strong showings from the South East (63) and North West (62), Scotland (44). IT services and financial were the two largest business sectors planning relocations or agreeing moves during the month.

The business leads covered the whole UK and provided details of the size of the office occupier, its likely move dates, a description of the reasons for the move, its business sector and full contact details including an address for written inquiries, at least one telephone number and in most cases an email address. Some of the largest planned moves and top picks amongst the 580 July leads. included those on Citi (Citigroup), HMRC, Credit Agricole and WeWork.

The July 2017 leads included 200 ‘identified requirements’. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 200 searches, 134 were new office searches, not previously notified to clients.

The most recent research also included 130 ‘potential movers’ which were mainly longer-term leads on occupiers, considering a relocation, but have yet to make a final decision on whether to search.

Most of the remaining stories covered companies that have signed for new office space and have set a move date, including some large pre-lets and companies inviting tenders for fit-out contracts. The shortest planned move date is just over a month away, whilst the longest was late 2020.

If you would like some information on flexible Metropolis subscription packages, then please email Simon at simon@metroinfo.co.uk

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Cityoffices.net, the sister property leads service to Metropolis, saw a further 33 stories posted in July, covering new development opportunities planning applications, consents, construction starts and development teams in London and major cities. The database now covers over 200 office schemes in the pipeline for construction starts in 2017-2020.

For more information on Cityoffices, email Andy at andy@metroinfo.co.uk

Central London Lettings – June 2017

Central London office lettings in June 2017 bounced back just over 1.75m sq ft of deals from 108 mid-large size transactions (5,000 sq ft+) during the month.

The June figure represents a near tripling of the 600,000 sq ft sq ft of lettings in May. It brings the Q2 2017 central London lettings to a very respectable 3.1m sq ft and comfortably above the 2.4m sq ft in Q1.

June was characterised by 14 office deals over 20,000 sq ft, which included WeWork’s 283,000 sq ft pre-let of the under construction Southbank Place building, SE1: Framstore took 93,000 sq ft at 28 Chancery Lane, WC2; Industrial Light and Magic took 47,000 sq ft at Lacon House, Theobalds Road, WC1 and Hermes taking 46,000 sq ft at 150 Cheapside in EC2.

Business Services topped the table of lettings by sector, underpinned by WeWork deals, this was followed by media and financial services with large deals involving Industrial Light and Hermes. IT services also performed well, helped by the lettings to Misys and Reply. Office deals ‘under offer’ in central London held steady at 3.5m sq ft and volumes are healthy in nearly all sub-markets.

By area, the City accounted for 32pc of the office floorspace let in June at 566,000 sq ft. The West End saw 315,000 sq ft of take-up. Midtown contributed 400,000 sq ft of lettings, which was equalled by Southbank. Current London office demand is calculated to be around 3.3m sq ft in the City and 3m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 840,000 sq ft (48% of the monthly total), as transactions for new space resumed their recent strong showing.

Cityoffices and Metropolis are releasing its twice yearly Skyline report on the London office construction market. The summer report features analysis of the 100 schemes under construction and the trends for the next wave of schemes. Details on Cityoffices from Andy King at andy@metroinfo.co.uk

Top June picks on Metropolis

Metropolis ran 650 ‘movers‘ in the month of June 2017. If all reported moves were added together the total would exceed 17 million sq ft of office searches and transactions, researched by Metropolis’ unique market led intelligence research team. London was the largest region with 295 leads during month, but there were also strong showings from the Yorkshire (77), South East (57) and North West (44). IT services and financial were the two largest business sectors planning relocations or agreeing moves during the month.

The business leads covered the whole UK and provided details of the size of the office occupier, its likely move dates, a description of the reasons for the move, its business sector and full contact details including an address for written inquiries, at least one telephone number and in most cases an email address. Some of the largest planned moves and top picks amongst the 650 leads included leads were those on Google, Global Switch, Dentsu Aegis and WeWork.

The June 2017 leads included 196 ‘identified requirements’. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 196 searches, 100 were new office searches, not previously notified.

The most recent research also included 200 ‘potential movers’ which were mainly longer-term leads on occupiers which are considering a relocation, but have yet to make a final decision on whether to search.

Most of the remaining stories covered companies that have signed for new office space and have set a move date, including some large pre-lets and companies inviting tenders for fit-out contracts. The shortest planned move date is just over a month away, whilst the longest was mid 2020.

If you would like some information on flexible Metropolis subscription packages, then please email Simon at simon@metroinfo.co.uk

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Cityoffices.net, the sister property leads service to Metropolis, saw a further 32 stories posted in June, covering new development opportunities planning applications, consents, construction starts and development teams in London and major cities. The database now covers over 200 office schemes in the pipeline for construction starts in 2017-2020.

For more information on Cityoffices, email Andy at andy@metroinfo.co.uk

Skyline Report Summer 2017

Metropolis and Cityoffices are about to publish their bi-annual survey of office construction in central London.

 

  • The survey brings readers all the statistics on the 101 office schemes in central London currently under construction and tenant activity connected to those schemes, right up to date to June 2017.

 

  • The survey, compiled after many hours of street surveys, telephone research and crosschecking, takes a snapshot of the central London office construction in Q2 2017, recent completions, recent pre-letting activity and looks ahead to future pipeline projects that will shape the next three years.

 

  • The report looks at the volume of construction underway, lists the major new scheme starts and looks at the proportion of refurbishment space compared to new builds. The report breaks down office construction by London district: City, West End, Midtown etc, as well as major recent building completions.

 

  • The survey also looks at occupier demand, with recent trends in pre-letting including examples of recent deals and a comparison with each of the last ten years.

 

  • The report then turns to the future pipeline including the 29 schemes currently at site preparation stage and 200 schemes with planning consent awaiting a start date.

 

  • Finally, it concludes with some forecasts for London office development based on current trends and makes predictions for London occupier demand over the rest of 2017 based on Metropolis’ detailed London office tenant research.

 

The report will be available free of charge to Metropolis and Cityoffices subscribers. If you are interested in a subscription contact Andy King at andy@metroinfo.co.uk

Refurbishment change

A recent report from Savills highlights the changing nature of office schemes in regional cities.

Rising construction costs and slim margins are pushing developers towards refurbishments and the new trend is for a higher quality of refurbishments according to Savills. Nearly 40% of the pipeline of office schemes in regional cities will be delivered in the form of refurbishments.

A sustained level of demand for space in many of the regional cities alongside a lack of new office schemes, is boosting demand for refurbished office space. Landlords are turning to refurbishments to capture lettings from professional occupiers including lawyers, accountants and engineering firms.

As an example, Helical’s ongoing refurbishment of Churchgate House in Manchester which has transformed the building from part-occupied and unattractive to now being fully let. Occupiers have been attracted by a new reception incorporating touch down space, collaborative working areas and a high quality cafe.

Aviva is refurbishing 11 Portland Street, Manchester, which will provide single floors of up to 20,000 sq ft. The major refurbishment incorporates an entirely new principal reception area which has been repositioned to the corner of Portland Street and Aytoun Street.

Savills expect Bristol to be the next city to see a step change in demand for refurbished office space, driven by both a shortage of new build office space.

Metropolis has published business leads on 160 planned office schemes in London and regional cities over the last six months including details of developers and architect contacts, as well as timescales and any pre-lets. In addition Cityoffices.net includes details of all pipeline schemes, with full contact names and numbers.

Central London Lettings – May 2017

Central London office lettings in May 2017 recorded just over 600,000 sq ft of deals from 40 mid-large size transactions (5,000 sq ft+) during the month.

The May figure represents a fall on the 800,000 sq ft sq ft of lettings in April, but the number of deals remains close to recent the monthly average.

May was characterised by six office deals over 20,000 sq ft, which included Hearst Publishing’s 71,000 sq ft deal at the LSQ Building in Leicester Square, WC2: WeWork took 70,000 sq ft at 1 Mark Square in London, EC2; Man Group taking 41,000 sq ft at 90 Upper Thames Street, London, EC4 and Petrochina taking 35,000 sq ft at the Adelphi Building in WC2.

Media topped the table of lettings by sector, underpinned by the Hearst Group deal, this was followed by business services bouyed by the serviced office sector and financial services with large deals involving Man Group and Hambro. Retail also performed well, helped by the lettings to Crabtree and Deliveroo. Office deals ‘under offer’ in central London rose to 3.6m sq ft and volumes are rising in nearly all sub-markets.

By area, the City accounted for 50pc of the office floorspace let in May at 300,000 sq ft – similar to the April level. The West End saw 90,000 sq ft of take-up. Midtown contributed 167,000 sq ft of lettings. Current London office demand is calculated to be around 3.2m sq ft in the City and 3m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 150,000 sq ft (25% of the monthly total), as transactions for new space paused from the recent strong showing.

Cityoffices and Metropolis are shortly to release its twice yearly Skyline report on the London office construction market. The summer report features details of the 100 schemes under construction and the trends for the next wave of schemes. Details on Cityoffices from Andy King at andy@metroinfo.co.uk