July 2011 Archives

It has been a quarter of some ups and plenty of downs... Here are some of the key facts for Q2 2011:

• Take up fell 21% compared with Q1 to 1.83 million sq ft, with the largest letting taking place at Central Saint Giles, WC2, where Google took on 155,000 sq ft.
• Available space fell around 4% versus Q1, the largest instruction was at 1 London Bridge, SE1, where some 177,000 sq ft has come onto the market.
• Rental levels remained relatively stable, with new-build stock averaging £46.77 per sq ft, up £2.20 per sq ft on Q1. Rental levels for secondhand stock decreased by 13 pence to £33.14 per sq ft.
• Investment transactions soared in Q2, increasing by 60% in terms of the volume of deals and 24% in terms of sq ft compared with Q1. Some notable purchases have been 10 Aldermanbury, EC2, measuring 336,000 sq ft for £260m and Aviva Tower, EC3, measuring 320,000 sq ft, for £288m.

In terms of the agency league tables, after the merger between Jones Lang LaSalle (JLL) and King Sturge, it is unsurprising that the biggest firm in terms of turnover is in top place for Q2. Not far back from JLL is CB Richard Ellis, which remains in second place taking a 22% market share. Cushman & Wakefield came in third position, while DTZ and Edward Charles & Partners came in fourth and fifth place respectively. The table below presents the performance of the top five disposing agents:

 For the full report please visit the EGi website: http://www.estatesgazette.com/offices/london-offices-market-analysis/ 

Come 2014, with all the skyscrapers towering over the financial district of City core, one would be forgiven to think they are in New York City. It has been noted that 100 Bishopsgate has gone under demolition - the next planned skyscraper for EC3. Application for the 40-storeys has been submitted in May, which will comprise of predominantly office space as well as retail components and a library. The planned 786,000 sq ft building will stand along side the Heron Tower and neighbour Tower 42.

Originally the tower was set to be six floors taller but this was reduced following concerns it would detract from the Gherkin and the Heron Tower and lead to a flat skyline. Looking at the proposed design by architects Allies and Morrison, the lower part of the tower splays out on one side giving the appearance of twisting slightly. It would be interesting to see what nickname this building will receive, if any of course. One can only imagine how dark and cold the area will look with other iconic buildings such as the Pinnacle and Cheesegrater being built in the same area. Either way, it should be a profitable investment for Great Portland Estates, as good quality stock is always hard to find and there should be plenty occupier demand.

The Crown Estate is doing nicely at the moment thanks to the resurgence of Regent Street, which has been looking a bit run down over recent years. It has been investing heavily recently in regeneration of Regent Street to make it more attractive for retailers and office occupiers.

Her Majesty is also doing well out the windmill business, taking advantage of new developments of off-shore windfarm developments. The Crown Estate owns most of the sea-bed around the British Coast, which it rents to renewable energy producers. From 2013 a 15 per cent slice of the Crown Estate's profits will go directly to the Queen, rather than to the Treasury through the Civil Lists arrangement.  

The value of Regent Street went up from £1.6 billion to a staggering £2 billion, largely due to the attractiveness of the street for overseas retailers, and its popularity as a shopping destination for tourists. The office space on Regent has also been popular for tenants, and 5 lettings have completed in Q2, with rents in the region of £40 per sq ft. The next step is to redevelop the southern end of Regent Street, which the Crown Estate are committed to pumping huge amount of cash into.

So HRH won't be going bankrupt any time soon.  

English Heritage is at it again! Not long after its failed attempt to get the Broadgate Square development listed it has moved on to the Lloyd's building. It is currently preparing a report for Culture Secretary Jeremy Hunt that is expected to recommend grade 1 status for the 25 year old building, making it the first postmodern structure in the City to receive such an honour.

Architect Richard Rogers, Lloyd's Chief Executive Richard Ward and The Twentieth Century Society are also strongly in favour of the building becoming listed, as long as it does not prevent internal alterations.

Previously, structures under 30 years old have only been listed to protect them from change or demolition. The designation of Lloyd's may help preserve what is left of its external panoramas and prevent a proliferation of skyscrapers from further eroding views of this distinctive building.

If listing goes ahead this month then the Lloyd's building will join the ranks of Britain's beautiful castles and medieval cathedrals. But does it live up to this? My personal opinion is that it absolutely does. It is a truly bespoke design and even though it is 25 years old it still looks very modern and doesn't appear out dated like a lot of buildings built around the same time.

Apparently the Lib-dems are on the move - the party has taken 6,700 sq ft at 10 Great George Street on ten years lease. Now the more cynical amongst us could argue the way things are going they may like to take advantage of cheaper rents further away from Parliament. However, in a burst of optimism the party is surrendering the lease on its headquarters at 4 Cowley Street to move closer to Westminster.  

Staff will be relocating to the new open plan office in September, where its former compartmentalised and segregated office arrangement will be relegated to the past. Apparently they were looking for a "new way of working, to adapt to the way the party wants to change." In that case what effects might we predict from a move to open plan? Perhaps someone was hoping sitting Nick Clegg with the rank and file will make him more amenable to the listening to the ideas of his party? On the other hand open plan offices can make it easier to keep tabs on the workforce; it is easier to work towards that common goal and enforce the party line when you are all sitting in the same room. Could this be a welcome opportunity for a reunification of the fractured party? Or alternatively is it simply ridiculous to analyse the psychology of a political party or indeed any type of business based on how it arranges its office? - Comments are welcome!

Furthermore, as if in a perfect representation of the one-upmanship of party politics the Conservatives are now understood to have instructed Cluttons to search for a new freehold for its headquarters, currently Millbank Tower in Westminster. So the Lib-dems are simply renting whilst the Tories are purchasing freeholds?  Analyse that as you wish...

Architects David Chipperfield have revealed their latest proposal for the redevelopment of the Elizabeth House site next to Waterloo station.

It's a rather dull, out-dated-looking building on High Holborn, but has a very interesting owner: beleaguered tyrant Colonel Gaddafi. The elusive Gaddafi, who is being pursued around Libya by American forces, has had his London office assets frozen by the Treasury Asset Freezing Unit, including Holborn Tower, 137 High Holborn. 

The Chancellor, George Osborne, froze the assets of Gaddafi and five of his family members in February, including 14 Cornhill, EC3, and Portman House, W1. But now a company called Tekxel, which is owned by the Libyan state, has been given permission to sell the Holborn Tower. It was apparently given permission because the building was costing more to run than it was making in rent. Jones Lang LaSalle has been appointed to sell sell the building. Tekxel claims they will not benefit from the proceeds of the sale, which will allegedly be given back to the people of Libya - or maybe not. 

Gaddafi also has an £11 million house in Hampstead Garden Suburb, which was recently taken over by squatters who oppose his regime. As well as trying to liquidise his London assets, he has reportedly also been smuggling gold, luxury watches and jewels into London so that they can be sold on the City's black market. Some of these have been seized at customs, but Gaddafi has such a big pile of treasure that he can afford to lose some at the border. He also has a huge pile of gold, but is having difficulties exchanging it for the weapons and cash needed to keep the war going.