February 2011 Archives

First prelet at 'Cheesegrater' coming soon?

By Nina Booty on February 25, 2011 1:27 PM | No Comments | No TrackBacks

Developer British Land and Oxford Properties are close to winning the race to secure their first pre-let at 122 Leadanhall Street, EC3. Namely, insurance giant Aon chose  this scheme as the preferred option for its long term 200,000 sq ft requirement.

Rent is likely to be around £52.50 per sq ft, and the company is expected to go under offer on lower large floors next month. Other options Aon was considering was Great Portland Estate's 100 Bishopsgate and Land Securities' and Canary Wharf's Walkie Talkie at 20 Fenchurch Street, both EC3.

'Cheesegrater' is expected to be delivered in 2014, similarly as Walkie Talkie- a time of expected high occupier demand as developers are hoping.

Looks like prelets are set to continue in 2011 for large occupiers, trend that we have seen returning in 2010. This is of course great news for developers and occupier markets. According to King Sturge we are expecting to see another five big City searches that could settle over the coming months.

TMT companies overtake financial services in West End

By Gemma Kennedy on February 22, 2011 9:50 AM | No Comments | No TrackBacks

dotcombubble.pngAccording to new research by King Sturge, the financial services sector has been overtaken as the biggest acquirer of office space in the West End. TMT companies accounted for 23% of rental agreements on West End offices in 2010, compared to 14% for the financial sector. The agent says that demand has been driven by technology and web-based companies, whose access to millions of users is attracting significant investment in the sector. Critics, however, have warned of a potential repeat of the dotcom bubble.

See here for further information.

More Posh Refurbs for the City

By Kyle Gellatly on February 18, 2011 2:11 PM | No Comments | No TrackBacks

British Land and Blackstone Group have recently received planning permission for a major refurbishment of 199 Bishopgate, part of the Broadgate Estate. The building was completed in 1991, but British Land has decided it's already in need of modernising. They plan to increase its height, relocate the entrance and add in mezzanine floors. Internally, the office floorplates and cores will be reconfigured to improve the layout, efficiency and flexibility of the space, although the total square footage will actually be reduced. The ceiling height of the top floor will be increased to help attract hedge-fund managers and secure high rents.  

It's part of a growing trend of deluxe refurbishments in the City, providing an alternative to getting the bulldozers out. Major corporates like Goldman Sachs have also opted for high-spec refurbishment, at their Peterborough Court office, to make it more modern and trendy, and make the space more flexible and eco-friendly. As Peter Wynne-Reese, Head of Planning for the City of London, told delegates at November's Estates Gazette Refurbishment and Retrofitting Offices conference, City planners are very receptive to refurbishment schemes at the moment, and are keen to avoid knocking good buildings down.

 

 

Bank of England keeps interest rates in place

By Nina Booty on February 11, 2011 12:32 PM | No Comments | No TrackBacks

Good news on the monetary policy, Bank of England has decided to keep the base rate on hold at 0.5% today for the 23rd month running.

Despite the fact that the that inflation is increasing, which would have called for early rate rise according to Bank's outset policy of 2% inflation target, BoE has made a wise decision too keep the rate at current levels. The rate rise would obviously be very harmful to our fragile economic recovery, enough to mention that in the last quarter the UK GDP growth posted a negative -0.5%. This is in addition to further government spending cuts, VAT and commodity price increases that are hitting the consumers and businesses.

Majority including my own personal opinion will see this as very good news, particularly the difficult mortgage market; housing and property sector do not need to see a higher interest rate to add on the negative impacts of current cuts and tax hikes. However, I was truly surprised that FT was commenting on this news by using somewhat negative or questionable tone, in the sense that BoE will need to explain itself for this decision. As this is becoming increasingly hard as the committee is not to look into economy but only 2% inflation target at all times. As now the inflation is approaching 4% mark this is becoming more difficult. But if the monetary policy is just working as some sort of 'machine' tracking the 2% inflation target, and if it is not allowed to look into economy as suggested here, in that case I wonder how come we have arrived to such low 0.5% interest rate in the first place? The decisions of lowering or increasing the interest rate are indeed based at both inflation indicators as well as the overall economy where the overall economic picture is far more important. In this case the inflation indicators are doing nothing else but showing the tax hikes and price rise due to that, in addition to pressures of price increases coming from abroad. Thus, by no means is this inflation that is caused by growth and urging to be controlled by policy rate increases.

Sainsbury's cancels move to King's Cross Central

By Gemma Kennedy on February 9, 2011 9:32 AM | No Comments | No TrackBacks

A disappointing blow for the King's Cross Central scheme this morning... The Times has reported this morning that Sainsbury's has abandoned plans to relocate to 250,000 sq ft at King's Cross Central, NW1, due to a lack of buyers for its headquarters at 33 Holborn, EC1.

It can no longer commit to the move because it could have been forced to pay rent on both buildings if no tenant was found in time. The development consortium of Argent Group, Hermes Real Estate, London & Continental Railways and DHL Supply Chain, have reportedly started marketing the site with advisers DTZ and Savills.
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