Thames Valley Autumn 2017

Recent research suggests that office take-up in the Thames Valley office market fell slightly in Q3 2017 to around 300,000 sq ft. of deals between July and late September. However, further pending deals amounting to over 250,000 sq ft of office space are understood to be under offer. Total take-up to the end of Q3 in 2017 is 1.25m sq ft.

The most active sectors were professional services at 20% and TMT (technology, media and telecommunications) at 19%, followed by pharmaceutical and life sciences sector, with Slough and Uxbridge as the most active towns. US-owned occupiers have around a 40% market share.

In Q3 2017, there were only five deals above 20,000 sq ft, down from nine large lettings in Q2. The largest single letting this quarter was WeWork taking 53,000 sq ft at 12 Hammersmith Grove. McAfee agreed a 19,500 sq ft move from the Bath Road to Slough town centre at the Urban Building. Fiserv signed to take 27,000 sq ft at the Porter Building in Slough, moving from Stockley Park. Some occupiers prefer to take existing space, with recent examples including: McLaren taking of 20,000 sq ft from SAB Miller in Woking and Birds Eye’s move to 40,000 sq ft of space sub-let from BP at Bedfont Lakes.

Occupier requirements have recently been driven by lease expiries, but there is emerging evidence of expansion led demand in the last two quarters.  The majority of current demand is in the sub 20,000 sq ft size band. There has been an increase in occupiers below 10,000 sq ft looking for small and flexible space.

Metropolis has confirmed nearly 150 medium/large office requirements in the Thames Valley since the beginning of 2017. Among some of the larger ‘live’ searches from at least 600,000 sq ft of new requirements in the area, include searches by: Novartis, JDA International and FCA Group. Metropolis is also tracking 140 Thames Valley companies with upcoming lease expiries, which could move in the next two years.

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Metropolis Q1 Research Update – Over 500 Office Requirements

 

Active Office Requirements

In Q1 2016, Metropolis researched over 500 companies actively searching for office space in the UK. Total office demand identified in Q1 hit 9.4m sq ft.

 

The top 5 sectors by UK office demand were:

Banking & Finance – 1.4m sq ft

Media – 1.1m sq ft

Technology & Telecoms – 0.8m sq ft

Government – 0.7m sq ft

Insurance – 0.5m sq ft

 

The top 5 UK Cities by office demand were:

London – 4.3m sq ft

Manchester – 0.6m sq ft

Leeds – 0.5m sq ft

Bristol – 0.4m sq ft

Glasgow – 0.3m sq ft

 

Potential Office Demand

Just over 5m sq ft of potential office demand, classified on the Metropolis database system as “Potential Mover” leads, was researched in Q1 2016. About 2.5m sq ft of this potential demand is attributed to office occupier lease expiry, which breaks down by year as follows:

2016 – 0.6m sq ft of office leases to expire

2017 – 1.2m sq ft of office leases to expire

2018 – 0.7m sq ft of office leases to expire

 

We could see about 200,000 sq ft of the potential demand from lease ends researched in Q1 2016 convert to active searches for office space this year, with several 20,000 sq ft + office requirements expected to surface from Media and Insurance companies in the next few months. One or two major requirements also look likely to trigger in the next few months from the 1.2m sq ft of 2017 leases due to expire, including a possible 80,000 sq ft West of London/Thames Valley requirement from a major Technology company.

 

The Metropolis database system holds all of the above data and thousands of other leads – for details on accessing the leads and joining Metropolis please email simon@metroinfo.co.uk or call us on 01296 631 186.

Metropolis Office Requirements – Q3 2014

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

West End Tops the League

News that London’s West End is again the most expensive office location in the world (CBRE Global Research) will not come as a great surprise to many of the companies that Metropolis speak to every day.

The overall occupancy cost of $277 per square foot per year in the West End in Q2 2014 outstrips both Central Hong Kong, ( $241 psf), as well as Beijing’s Finance Street in 3rd. The net effect has been to drive many of the more budget conscious sectors to locations such as Hammersmith, London Midtown and Southbank, as high paying hedge funds and consultants move in

CBRE are also predicting that occupancy costs will rise again in the latter half of 2014, as a recovering economy and a lack of available space in the West End push another wave of tenants to think seriously about the economics of renewing their leases or moving elsewhere. Recent and planned moves out of the West End by companies such as Ramboll, Saatchi & Saatchi and SEI Investments underlines the trend and a large portion of the 200 companies (with 2 m sq ft of requirements) currently looking at West End space are likely to move to an adjoining area..

Digital office demand

A recent report from Jones Lang LaSalle (JLL) argues that the upsurge of businesses from the digital and media sectors looking for office space in the EC1 area of London, means that this area can no longer be considered “fringe” in the context of London rents and office developments.

The Government’s “East London Tech City” initiative to promote Silicon Roundabout’s profile is increasing the global spotlight on the area. ‘Tech City’ encompasses the Shoreditch, Hoxton and Old Street areas of London. Technology firms have been one of the first sectors to take advantage of the improving UK economy and London is viewed as the best location for access to investors, drawing companies in

In terms of subsequent demand for office property this is a trend being tracked at Metropolis, with over 60 current local search requirements listed on the database, including office occupiers such as NeueHouse, Vodafone and Microsoft. In addition, there are a further 50 companies which have expansion plans or arDigitale approaching lease expiries in the area which will lead to property decisions.

Meanwhile, average office rents have risen from £17.20 per square foot to £33.60 in 2013 in the Shoreditch to Hoxton districts, according to Cushman Wakefield, which has led to a pricing out of some of the smaller start-ups in favour of the bigger companies. Start-ups such as GirlMeetsDress.com and Hassle.com say they moved away from the area due to surging rents. So the growth of the area has led to movement in both directions.

Mainstream developers are homing in on Silicon Roundabout, with schemes including Derwent London’s White Collar Factory and Helical Bar’s 207-211 Old Street scheme in the pipeline for 2015 – 2016. There is around 1 million sq ft of speculative space either under construction or with planning permission.

Looking ahead, some of the fastest growing digital companies in London include: Fixnetix, Leadpoint, Mimecast, Quickstart Global, Monitise, Forward Internet, Grove Group, Media Ingenuity, Translate Media and The Foundry. Metropolis is currently talking to many of these firms over their future property requirements.