March 2011 Archives

Construction has now completed on the Heron Tower, Bishopsgate. And it will have the new must have accessory of the modern office development: yes, an aquarium, complete with its very own SHARK. Which may look a bit like this (although probably still alive):

The aquarium's tenants are due to move in in this summer, and will include 1,200 fish of 67 different species. It is located in the reception area, and will be the largest privately-owned aquarium in London. Even more bizzarely, the fish are being imported from Heron Island, near the Great Barrier Reef. Here's a pic of it from the construction firm Skanska, who installed it in the lobby.

Marketing has yet to begin on the tower, but already a few companies have taken space, US law firm McDermot, Will & Emery, Landmark and Drake & Morgan. Sushisamba will operate the restaurant and sky bar at the top of the tower.

The government has announced new measures in the Budget which will allow office space to be converted into residential space. This will give owners another way of avoiding the dreaded empty property rates. It will allow some small offices, studios and light industrial buidings to be converted without the need for change-of-use planning permission.

It is thought to be particularly helpful for the regions, where office space often remains vacant for the long-term, being effectively redundant. This is the case in cities like Newcastle, where many speculative developments in the city centre - built during the last boom - have remained vacant for years, with little prospect of securing tenants and, moreover, being located in areas where demand for city centre residential space is high.

As featured on on Guerilla Homes, innovative conversions of industrial buildings are popular in London, such as this one by KnotArchitects, on a former clothing factory.

But what about London? Here the problem is often more short-term vacancies. So could offices be converted for short term residential use? Other more wacky solutions investigated on the program Guerilla Home included garden-sheds which have been erected in empty industrial buildings, to be used as bedrooms. Why not in empty offices as well?

For more long term change of use, many former industrial buildings have been successfully converted. For example, located in Philadelphia, this condominium complex not only takes advantage of the bones of the factory buildings, but incorporates new eco-friendly features like rainwater harvesting and solar power. The same principles could easily be applied to office buildings.

And this one below is completely unrelated: an old train car turned into a Russian Orthodox churches.

The biggest deal of this quarter has been completed with 112,000 sq ft being let to NBC Universal at the iconic and colouful Central Saint Giles development. The deal was overseen by Cushman & Wakefield and Jones Lang LaSalle who acted as joint letting agents. The remaining available space in the building has gone under offer to one tenant.

 BBC's revamp of Broadcasting House has finally come to an end. Following the completion of constuction works last year, nearly all the interiors have now been fitted out. As shown below, it's a very impressive design, incorporating the original, art-decor building with the modern-style new wing with a glass and steel facade

As would be expected with the Beeb, the project ran hopelessly over time and budget, with lots of controversy and internal wranglings over the design. It has taken nine years, with major re-designs and changes in architect along the way.  Some staff will move in at the end of 2011 for its Television Centre in White City, while another 5,000 staff will now have to wait till 2013 to move in. (Why that long?!)

The building is one of the most iconic in London. It is now the first purpose-built broadcasting centre in the UK, and will handle TV, radio and online operations. The hefty billion-pound price tag will partially be recouped by the sale of Televison Centre, and Bush House, Aldwych.  

Photos courtesy of Simon Kennedy

Internet giant Google is said to be considering a move from its London-home offices in Victoria and may be taking up a 700,000 sq ft of office space in the new King's Cross Central scheme.

Currently the group occupies a 121,500 sq ft space across two buildings in Victoria but is searching for a more suitable single long-term space. Also recently Google has been looking to purchase the buildings that it will occupy as we mentioned in our earlier blog (04/03/2011). It looks like Google may be planning a deal where it would prelet half of the space at a rent in the mid-to-high £40s per sq ft, and buy half for around £200m.

The huge mixed-use scheme at King's Cross is being led by Argent, Hermes and London & Continental Railways, with Argent already having secured detailed planning consent for three office buildings. 

BNP Paribas Real Estate has committed earlier in the final quarter of 2010 to take a large chunk of space at the development in a 350,000 sq ft office owner occupier pre-let, where it will build this space making its first UK property development.

Glasgow-based property development and investment giant City Site Estates is to sell four of its London buildings in an attempt to raise equity to spend on the rest of its UK portfolio. They are hoping to capitalise on the high yields in Central London, and will then look to pick up bargains outside the capital. They plan to sell Hobhouse Court, SW1, Bevis Marks House, EC3, 51 Eastcheap, EC3, and 6 Kensington Church Street. The buildings are being sold for a total of £130 million and are being marketed individually by GM Real Estate and CB Richard Ellis. It represents a radical change to their £350 million portfolio. But will other companies follow suit?  

Internet search engine Google has instructed CB Richard Ellis to search for more than 400,000 sq ft, upscaled from 150,000 sq ft it had searched previously. Google has recently been involved in purchase of two building for occupation in Dublin of which one building has not been bought yet but is in the process nearing exchange. Thus, it looks increasingly likely that Google would rather buy its own site for occupation in London as well, then just take a pre-let or lease agreement.

Google is currently based at 80,000 sq ft Belgrave House, SW1, and last year it also took 45,000 sq ft at 123 Buckingham Palace Road, on a five year lease.

Such a big change of its space requirement makes a move outside of the core West End more likely. Potential options include King's Cross Central N1, Paddington Central, North East Quadrant NW1, and  440,000 sq ft London Bridge Place, SE1, all new developments.

Benefits of purchasing rather than just taking a lease are that it would offer Google total control of the building and opportunity of sale and leaseback at a later stage to potentially make a return on investment and recapitalise if required.