Thames Valley gives mixed signals

A new report from Lambert Smith Hampton (LSH) on the Thames Valley office market reveals a mixture of trends.  LSH report 126 enquiries (over 5,000 sq ft) in Q1 2017, an increase of 31% compared with the 96 received in the previous quarter, however these are mainly made up of smaller enquiries and LSH say that requirements for units of over 30,000 sq ft are running well below the long term average.

Take-up in Q1 2017 was 425,352 sq ft, a fall of 3 % from the 439,331 sq ft transacted in the previous quarter and 18.6% below Q1 2016’s total of 522,770 sq ft. The total is below the five-year average take-up of 482,169 sq ft and given the drop in large enquiries, take-up may suffer in upcoming quarters. Large deals included: MediaWorks, White City – 70,000 sq ft acquired by Net-a-Porter and Tor, Maidenhead – 40,000 sq ft letting to Rank Group.  Moves underway include Body Shop, Maersk, Macquarie Bank and EDF Energy.

The active sectors in Q1 2017 were professional (31%), technology, media and communications (25%) and pharmaceuticals (14%).  LSH say that 74% of all office take up in Q1 2017 was centred on just five of the 14 centres – Blackwater Valley, Bracknell, Maidenhead, Oxford and Reading. Reading continues to attract some big names and it’s key Business Parks are home to some of the world’s largest high-tech firms including Microsoft, Oracle, Cisco, Symantec, Logica CMG, Huawei, Veritas and more recently, major corporates such as Bayer and Thales.
Metropolis has published 260 stories about the relocation plans of 260 Thames Valley and South East companies in the last three months; including 75 companies searching for office space. In addition, it has reported on the plans of a further 60 companies that are approaching lease decisions.
The outlook for the Thames Valley seems to be for a slightly muted summer 2017, but with the recent rating revaluation and the nearing of the completion of the Elizabeth line, the near-term will see more occupiers relocating further out of Central London along the Thames Valley from early 2018.

Metropolis April Round-Up

Metropolis ran 600 ‘movers’ in the month of April 2017. If all moves were added together the total would exceed 16 million sq ft of office transactions, researched by Metropolis’ unique market led intelligence team. London was the largest region with 286 leads during month, but there were also strong showings from the South East, West Midlands and Yorkshire. Financial services and professional were the two largest business sectors planning relocations.

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 Sungard, Amazon, Royal Bank of Canada and HMRC.

The April 2017 leads included 175 ‘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 175 searches, 121 were new office searches, not previously notified.

The most recent research also included 184 ‘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 25 stories posted in April covering new development opportunities planning applications, consents, construction starts and development teams. 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

Reasons to be Post-Brexit Cheerful 1, 2, 12…

Despite a lacklustre Q2 London office market in the run up to EU referendum vote, the July deals have come thick and fast this week as the market shakes off the blues. Deals concluded this week have included these 12:

Wells Fargo, the US bank, has bought the under construction 227,000 sq ft 33 Central office development in London, EC4 for its own occupation as its new London HQ.

The Government Property Unit has signed for 400,000 sq ft of deals at 20 Cabot Square, London, E14 for a host of public sector bodies including 150,000 sq ft for regulator OFGEM.

Derwent London has pre-let 84,600 sq ft in four deals at its 185,000 sq ft refurbishment of The White Chapel Building E1. Incoming tenants include Reddie & Grose, Perkins & Will, The Shipowners’ Club and Unruly Media.

Exterion Media, the advertising agency, is taking the 2,323 sq m (25,000 sq ft) seventh floor of the newly-completed 84 Theobalds Road office scheme, London, WC1

David Game Tutorial College take the 60,000 sq ft 31 Jewry Street, London, EC3.

University College London take 23,000 sq ft at 1 St Martin’s Le Grand, EC1.

Kames Capital and MS Amlin take expansion space at the Leadenhall Building.

Public Lab, a DIY environmental science community, is due to sign for 15,000 sq ft at Aldgate Tower, London, E1.

Further details of these and many more upcoming relocations are available to Metropolis subscribers at http://www.metroinfo.co.uk

Requirements in Belfast

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.

Occupiers go footloose

A recent market bulletin by property consultant JLL mentioned the trend for London office occupiers to move across the central area in the search for the right office space.

Research by Metropolis for its April 2014 London fit-out report bears out the point. Amongst the large grade A lettings completed in the last 12 months, some 25% of them involved companies taking space in different London districts to the one they are currently located in.

Examples include: Capita moving from the West End to 104,000 sq ft at 10 Aldermanbury in EC2; Hachette moving to 135,000 sq ft in EC4 from Euston; Ramboll moving to 30,000 sq ft at 240 Blackfriars Road in SE1; Google moving from Victoria to 730,000 sq ft at Kings Cross; EY and Shell moving from Southbank to Docklands. There are many more smaller examples among last year’s 12m sq ft of office deals in central London.

A review of the current near 700 outstanding requirements for office space in London suggests only 60% of occupiers are looking in only their existing office district, or adjoining areas, with as much as 40% of London tenants prepared to consider anywhere in the central area.

Conversations with tenants suggest that the quality of the office space has become more important than micro location, when considering London office moves. In addition, there have been relatively few new office schemes completed in the West End in recent years which, in combination with high rents, has pushed tenants towards other areas.

Looking ahead, recent deals in Q1 2014 suggest the process is speeding up with lettings at The Shard in SE1, Pancras Square in Kings Cross and a raft of deals in Canary Wharf, E14 showing a movement to good quality space in what could be considered slightly fringe areas. We expect this trend to continue through 2014 and 2015 based on the footloose searches by London tenants currently out looking.

Edinburgh office surge

A report this week by Edinburgh property consultant CKD Galbraith indicated that Q3 2013 office take-up in Edinburgh had reached 270,000 sq ft; which is up sharply on previous quarters.

The relocations announced were dominated by five big lettings: 85,000 sq ft at 3 Lochside Avenue to Sainsbury’s Bank; 33,000 sq ft to Jardine Lloyd Thompson at 7 Lochside Avenue; 55,000 sq ft at Capital House to Bank of New York Mellon; 32,000 sq ft at Atria One to PwC and Skyscanner taking a further 10,000 sq ft at Quartermile One. These five deals accounted for 80% of space transacted.

Research by Metropolis suggests there are still some 40 firms searching for space in Edinburgh, however most are looking for below 20,000 sq ft. A number of deals are currently ‘under offer’.