Scottish Offices 2018

Lambert Smith Hampton, the property adviser, has just published its review of the Scottish office market in 2017 and makes its predictions for 2018.

LSH say that for half of office movers in Glasgow, Edinburgh and Aberdeen (57% of occupiers), relocation was more likely to be prompted by a lease expiry or break option, a pattern that underlines the importance of market churn over inward moves from companies based outside Scotland.

Notable transactions triggered by lease events included State Street Bank and Trust Company (65,628 sq ft at Lauriston Place, Edinburgh), the Scottish Prison Service (51,009 sq ft at
Redheughs Rigg, Edinburgh) and Balfour Beatty (43,568 sq ft at Maxim 7, Glasgow).

Expansion was the trigger for 26% of relocations, indicating ongoing confidence among occupiers. Expansion also played a part in a number of deals in Aberdeen despite the dip in oil prices, albeit none of these involved occupiers in the energy sector. Key deals spurred by expansion included the University of West Scotland (225,000 sq ft), Computershare (41,395 sq ft) and the Student Loans Company (40,853 sq ft). Common among these occupiers was a desire for better quality office space or a more effective working environment.

In Edinburgh, location was behind the vast majority of relocation choices. In Glasgow, location accounted for less than half of deals. In some instances, occupiers were able to expand at the current base. For
example, Wescot Credit Services acquired an additional 10,567 sq ft at 38 Cadogan Street, Glasgow while Actavo acquired a further 10,685 sq ft at Alexandra Parade, Citypark, Glasgow.

Better quality office space was cited as the key driver of choice in 14% of deals, a notable example being Mott MacDonald’s acquisition of 34,515 sq ft of grade A space at St Vincent Plaza in Glasgow. Improved efficiency was the key driver of choice for 12% of deals, the largest being ST Microelectronics acquisition of 21,530 sq ft of grade A space at Tanfield, Edinburgh.

Looking ahead, to the end of 2020, Scotland’s five largest town’s and cities possess almost 450 known lease events in excess of 5,000 sq ft. 2018 will see 145 lease expiries and breaks above 5,000 sq ft across the
key markets, amounting to just over 2.1m sq ft of potential demand.

Metropolis is currently monitoring over 50 Scottish companies with plans to move in 2018 and over 100 occupiers coming up to decisions on leases in Aberdeen, Glasgow and Edinburgh.

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Central London office lettings in December and 2017 Summary

Central London office lettings in December 2017 reached a healthy 1.1m sq ft of deals from 40 mid-large size transactions (5,000 sq ft+) during the month. The December figure slightly outperforms the current monthly average of 1m sq ft . Annual London take-up reached 12.2m sq ft, just above the 2016 figure.

December was characterised by 13 office deals over 20,000 sq ft, which included Turner Broadcasting’s 100,000 sq ft letting at 160 Old Street, EC1; Penguin’s 83,000 sq ft letting at Embassy Gardens, SW8; Vitol took 48,000 sq ft at Nova, SW1 and Enstar took 32,000 sq ft at Creechurch Place, EC3.

Media topped the table of lettings by sector, underpinned by Turner and Penguin deals. This was followed by IT services with the large deals involving Google and Dell.  Insurance and business services also performed well, helped by the lettings to Enstar and XBridge. Office deals ‘under offer’ in central London fell slightly to 3m sq ft but pending deal volumes are healthy in nearly all sub-markets.

By area, the City accounted for 39pc of the office floorspace let in December at 419,000 sq ft. The West End saw 184,000 sq ft of take-up, underpinned by Vitol. Midtown contributed 236,000 sq ft of lettings, plus 90,000 sq ft of Docklands deals. Current London office demand is calculated to be around 3m sq ft in the City and 2.7m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 558,000 sq ft (52% of the monthly total), as transactions for new space resumed their recent strong showing.

Metropolis research is currently monitoring 640 ‘live’ London requirements, with deals for space of up to 1.8m sq ft due to sign in the next few months.

Cityoffices is shortly to publish its annual review of the planning pipeline in London. Further details of planning applications and consents, with scheme by scheme detail are listed on the Cityoffices.net website. Details on the report and the Cityoffices database from Andy King at andy@metroinfo.co.uk

2017 Review

The 12.2m sq ft of central London take-up recorded in 2017 (deals 5,000 sq ft and above) was slightly above the 11.9m sq ft recorded in 2016.

The largest deals were lettings to Deutsche Bank, Dentsu Aegis, then 3 lettings to WeWork

The serviced office sector took nearly 2m sq ft of offices in 2017. WeWork let over 1.24m sq ft (10%) of the total 2017 take-up

As well as Business services, Financial services took 1.9m sq ft, IT sector took 1.5m sq ft, Media took 1.2m sq ft and Professional 1.1m sq ft

The City accounted for 5.1m sq ft, Midtown 2.4m sq ft, West End was 3.1m sq ft

Central London office lettings in November 2017

Central London office lettings in November 2017 reached a healthy 1m sq ft of deals from 40 mid-large size transactions (5,000 sq ft+) during the month. The November figure matches the current monthly average of 1m sq ft .

October was characterised by 17 office deals over 20,000 sq ft, which included Lloyd Bank’s 117,000 sq ft letting at 125 London Wall, EC2, Hyperion’s 115,000 sq ft letting at Creechurch Place, EC3; WeWork took 90,000 sq ft at 131 Finsbury Pavement, EC2 and GAM took 42,000 sq ft at 8 Finsbury Circus, EC2.

Business Services topped the table of lettings by sector, underpinned byWeWork deals. This was followed by financial services with the large deals involving Lloyds Bank, GAM and Blue Crest.  Insurance and Media also performed well, helped by the lettings to Hyperion and Moonpig. Office deals ‘under offer’ in central London fell slightly to 3.4m sq ft and pending deal volumes are healthy in nearly all sub-markets.

By area, the City accounted for 57pc of the office floorspace let in November at 563,000 sq ft. The West End saw 235,000 sq ft of take-up, underpinned by WeWork. Midtown contributed 132,000 sq ft of lettings, although there were no significant Docklands deals. Current London office demand is calculated to be around 3.1m sq ft in the City and 2.8m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 661,000 sq ft (66% of the monthly total), as transactions for new space resumed their recent strong showing.

Metropolis research is currently monitoring 635 ‘live’ London requirements, with deals for space of up to 1.9m sq ft due to sign in the next few months.

Cityoffices and Metropolis  has produced its latest London Skyline report for Q4 2017. The report contains details of new office schemes under construction, demolitions underway and projections for future construction. Further details of planning applications and consents, with scheme by scheme detail are listed on the Cityoffices.net website. Details on the report and the Cityoffices database from Andy King at andy@metroinfo.co.uk

Metropolis Xmas Quiz Answers

Metropolis Xmas Quiz Answers

1. Deutsche Bank
2. 1400
3. 12.6m sq ft
4. 75%
5. £135 psf
6. 95
7. Clyde & Co
8. 170
9. ISG
10. 11m

Merry Christmas to all Metropolis Office Market Blog readers !

Metropolis Office Movers in November 2017

Metropolis ran 640 business leads on ‘office movers’ in the month of November 2017. If all reported moves were added together the total would exceed 12 million sq ft of office searches and transactions, researched by Metropolis’ unique market led intelligence research team. London was the largest region with 288 leads during month, but there were also strong showings from the South East (64), North West (63) and Scotland (39). Business services, IT and financial services were the 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, company 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 640 November leads, included those on Facebook, Channel 4, WeWork, Bupa and Lloyds.

The November 2017 leads included 214 ‘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 214 searches, 124 were new office searches, not previously notified to clients.

The most recent research also included 149 ‘potential movers’ which were mainly longer-term leads on occupiers, considering a relocation, but the occupier has yet to make a final decision on whether to search.

Most of the remaining stories covered companies that have just 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.

Recent research by Metropolis concluded that a conservative estimate of ‘live’ business opportunities on the database in recent months exceeded £1bn of business.

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, has published its ‘Autumn 2017’ survey on the office construction market in central London, with details of new schemes starting, the dozens of schemes at preparation stage and 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 Skyline Report 2017

Metropolis and Cityoffices have published their Winter 2017 survey of the London office market for clients and those due to take subscriptions in December 2017 and January 2018.

The new report covers:

  • Commentary on the 92 London office schemes under construction at the beginning of Q4 2017;
  • The report examines the 32 new London scheme starts between Q1 and Q3 2017, as well as schemes completed over the course of 2017;
  • The analysis looks at the next wave of schemes due to start construction over the next few months, with examples;
  • A section on occupier demand looks at space pre-let in under construction and recently completed schemes;
  • Further sections examine London office lease ends in 2016 and trace the destinations of those occupiers in 2017;
  • The report concludes looking ahead of 2018, in terms both of those 6m sq ft of schemes currently at demolition stage and those tipped to see construction starts over the next 12 months.

The closing sections of the report also cover forecasts of likely office completion levels in 2018-2020 and current levels of office demand amongst London occupiers, set against trends in the letting of grade A office space in central London.

All figures are based on Metropolis and Cityoffices’ huge weekly business leads bulletins and website which delivers 130+ weekly interviews with office occupiers considering relocations, fit-out news and office scheme developers.

If you would like to find out more about a trial subscription in December or January 2018 to Metropolis and claim a free Skyline report, then email Simon at simon@metroinfo.co.uk

 

Central London Lettings and Pre-lets – October 2017

Central London office lettings in October 2017 reached a healthy 1.3m sq ft of deals from 60 mid-large size transactions (5,000 sq ft+) during the month. The October figure exceeds the current monthly average of just under 1m sq ft .

October was characterised by 14 office deals over 20,000 sq ft, which included Dentsu Aegis’ 310,000 sq ft pre-let at 1 Triton Square, NW1, Sidley & Austin’s 120,000 sq ft pre-let at 70 St Mary Axe, EC3; WeWork took 107,000 sq ft at One Poultry, EC3, and Red Bull took 37,000 sq ft at Seven Dials, WC2.

Media topped the table of lettings by sector, underpinned by the Dentsu Aegis deal. This was followed by professional services with the large deals involving Sidley Austin and Grant Thornton.  Business services also performed well, helped by the lettings to WeWork and Orega. Office deals ‘under offer’ in central London fell slightly to 3.5m sq ft and pending deal volumes are healthy in nearly all sub-markets.

By area, the City accounted for 32pc of the office floorspace let in October at 414,000 sq ft. The West End saw 553,000 sq ft of take-up, underpinned by Dentsu Aegis. Midtown contributed 147,000 sq ft of lettings. Current London office demand is calculated to be around 3.2m sq ft in the City and 2.9m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 718,000 sq ft (55% of the monthly total), as transactions for new space resumed their recent strong showing.

Metropolis research is currently monitoring 630 ‘live’ London requirements, with deals for space of up to 1.8m sq ft due to sign in the next few months.

Cityoffices and Metropolis  has produced its latest London Skyline report for Q4 2017. The report contains details of new office schemes under construction, demolitions underway and projections for future construction. Further details of planning applications and consents, with scheme by scheme detail are listed on the Cityoffices.net website. Details on the report and Cityoffices from Andy King at andy@metroinfo.co.uk