Manchester’s Top Future Relocations

Lambert Smith Hampton has just released its Manchester office market report for Q2 2017. City centre office take-up for reached 284,497 sq ft across 68 transactions, a 23.3% increase on the same quarter in 2016. The cumulative 492,730 sq ft for the first half of 2017 is an increase of 14.6% on 2016.

The latest big relocations, movers and inward investments included: co-working giant We Work taking 55,802 sq ft offices at No.1 Spinningfields. Weightmans took 17,949 sq ft at the same building. EY is taking 40,000 sq ft at 2 St Peters Square; Car Finance 247 is relocating to 40,000 sq ft at Universal Building, Devonshire Street North; Distrelec is taking 17,000 sq ft at 2 St Peter’s Square, while Vodafone signed for 33,000 sq ft at Atlantic House.  Lookers acquired the 21,000 sq ft Aspect House in Altrincham,  21,200 sq ft was let at Regent Place, Salford to Convergys and Kaplan Financial also agreed a 10,000 sq ft move. Deals under 3,000 sq ft still accounted for 40% of take up

LSH secured the largest office deal this year outside of the city centre by acquiring 47,149 sq ft at 106 Dalton Avenue at Patrizia UK’s Birchwood Park, Warrington for Cavendish Nuclear. Business Services, consumer services and leisure and banking and finance have been the strongest sectors for take-up in the first half of the year. These three sectors accounted for 34%, 20% and 18% of take-up respectively

Metropolis is monitoring around 50 current office requirements in Manchester and around 60 ‘potential movers’, that is companies approaching lease expiries or with expansion plans, which have not decided whether to move yet.

Looking ahead, Manchester is expected to see faster office based employment growth over the next five years than Greater London and all of the major UK regional cities. Office based employment is
expected to grow by 6% over the next five years, significantly above the UK average of 3.5%.

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

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

Metropolis Movers May Round Up

Metropolis ran 641 ‘movers’ in the month of May 2017. If all moves were added together the total would exceed 20 million sq ft of office searches and transactions, researched by Metropolis’ unique market led intelligence team. London was the largest region with 296 leads during month, but there were also strong showings from the South East (69), North West (57) and Yorkshire(54). Financial services and media were the two largest business sectors planning relocations or agreeing moves.

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 amongst the 600 leads included leads on Barclays, British Airways, AMEX and HMRC.

The May 2017 leads included 212 ‘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 212 searches, 112 were new office searches, not previously notified.

The most recent research also included 173 ‘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 30 stories posted in May, 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

London Movers Uncovered

Cushman & Wakefield has recently published its ‘Movers & Shakers’ report on London office movers in 2016. Metropolis sets the report’s findings in the context of the most recent 140 new, named, London office requirements researched and published on its database over the last three months in 2017.

C&W’s report looks at 249 transactions over 10,000 sq ft in 2016, which accounted for over 75% of all leasing volumes in Central London. These deals totalled 8.1m sq ft and included 160 deals for properties located in the City & East London and the remaining 89 in the West End or West End fringe.

Companies already located in London moved from a total 5.1 million sq ft, taking 8.1 million sq ft, which equated to a net take up of 3 million sq ft or 37% growth. This contrasts with 2015, when companies expanded by 3.2 million sq ft, but overall London take-up was 1 million sq ft higher.

Expansion was evident across all business sectors. The tech sector saw the greatest expansion in 2016, registering 875,000 sq ft of growth. While banking & financial services expanded by 675,000 sq ft. Retail, media, legal and professional also all had a solid year.

Tech companies increased their footprint three-fold in 2016. Apple’s pre-let of nearly 500,000 sq ft of space at Battersea Power Station was backed by deals to Palantir, Adobe, Deliveroo Facebook, Google and Amazon.

The average actual distance moved during 2016 was just over 1.1 miles, which is down on the distances seen in 2014 and 2015.

Aldgate and Whitechapel recorded positive migration, with the area seeing a large increase in in-movers, including 10 moving in. The refurbishment of the White Chapel building and redevelopment of Aldgate Tower were drivers. Elsewhere in the City fringe, the redevelopment of the White Collar Factory and the Bower have continued to attract companies.

Mayfair and St James’s has continually had more out-movers than in-movers, whilst Aldgate and Whitechapel and Canary Wharf and Docklands have consistently had more in-movers than out-movers on balance.

Cushman & Wakefield estimates that companies new to Central London in 2016 accounted for 4% of total transactions by number or 417,859 sq ft and included significant migration from companies such as Salesforce, Amazon and Tableau Software moving into the capital.

Moving onto 2017, 140 companies in central London have confirmed to Metropolis the launching of new office requirements over the last three months. These include 51 from the City, 6 from Docklands, 7 from Southbank, 40 from the West End core, 12 from midtown and remainder from fringe locations.

Again, new requirements saw finance and tech sectors leading the way with more than 20 new requirements each, followed by media, business services and representative bodies.

Some of the largest examples include Hyperion and Deutsche Bank in the City, Misys and American Express in the West End. If all new requirements are combined, then an extra 2.5 million sq ft of new London office requirements were added to the Metropolis database in the February to May 2017 period.

In the new batch of London requirements researched by Metropolis, 60% of the companies searching are looking for more space than currently occupied, suggesting that the net expansion of office space recorded by C&W in 2016 is likely to continue in 2017.

Central London Office Lettings – April 2017

Central London office lettings in April 2017 recorded nearly 800,000 sq ft of deals from 41 mid-large size transactions (5,000 sq ft+) during the month.

The April figure represents a fall on the 1.05m sq ft sq ft of lettings in March, but remains close to recent the monthly average.

April was characterised by 13 office deals over 20,000 sq ft, which included Nex Group’s 111,000 sq ft sublet at Fruit and Wool Exchange: Wither’s 60,000 sq ft pre-let at 20 Old Bailey in London, EC4; BUPA taking 56,000 sq ft at Angel Court Tower, London, EC2 and Equinix taking 29,000 sq ft at the Pepper Store in EC2.

Financial services topped the table of lettings by sector, underpinned by the Nex Group deal, this was followed by business services bouyed by the serviced office sector and professional services with large deals involving Withers and DLA Piper. Property and construction also performed well helped by the lettings to M7 Real Estate and Sir Robert McAlpine. Office deals ‘under offer’ in central London rose to 3m sq ft and volumes are rising in nearly all submarkets.

By area, the City accounted for an improved 57pc of the office floorspace let in April at 440,000 sq ft – 50% up on the March level. The West End saw 160,000 sq ft of take-up. Midtown contributed 130,000 sq ft of lettings. Current London office demand is calculated to be around 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 469,000 sq ft (60% of the monthly total), as transactions for new space maintained their 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

Newcastle Office Market

A recent 2017 report by Knight Frank, revealed that Newcastle city centre take-up fell by 15% during 2016 reaching 220,000 sq ft.

Business Services accounted for the largest proportion of city centre take-up in 2016 at 22%. There was also a continued increase in activity in the TMT (technology, media and telecom) sector.

Out of town, total take-up reached 492,000 sq ft, with the North East has attracted an increasing number of ‘footloose’ occupiers in recent years.

Key transactions included a 35,000 sq ft letting to Convergys at The Rocket in the Stephenson Quarter. The most significant deal in the TMT sector was Zerolight’s new lease of the entire LiveWorks development on Newcastle Quayside (15,000 sq ft) only months after the building completed.

Metropolis is monitoring around 20 companies with identified or possible office searches in Newcastle.

Figures from local agent Naylors show 177,041 sq ft of out of town office space in Newcastle was let in Q1 of 2017. In contrast, only 33,461 sq ft of city centre office space was let in the same period. In Q1 2017, Frank Recruitment let 19,000 sq ft at the St Nicholas Building, while Sir Robert McAlpine is taking 8,000 sq ft in the same building.

Out of town, Quorum Business Park secured the largest letting with Sitel taking 47,000 sq ft. Other significant deals included Leeds Building Society moving their regional HQ from Silverlink to Cobalt Business Park and Parseq acquiring 20,000 sq ft at Camberwell House, Doxford Business Park.

The office market in Newcastle remains relatively quiet, with the majority of companies approaching lease events in 2017, choosing to renew current arrangements rather than search for alternative space. Future market growth is likely to mainly come from companies outside the region inward investing and expansions.