Following a year of exceptionally strong returns on commercial property, the London market has started 2015 dominated by optimistic rental growth prospects and by changing occupier trends.
According to market analysts at Savills, activity levels began to accelerate in February across all commercial sub-sectors, being consistent with the trends observed during the past six months. London’s established reputation as a global hub for businesses in the knowledge economy has brought about an increase in the amount of funding devoted to research and development (over £1.5 billion a year according to the most recent data). This fact has had a clear effect on the London commercial property market, which continues to provide support to new startups and relocating businesses. In turn, this has prompted changing occupier trends. Companies who operate in the knowledge-intensive sector have begun to look for properties beyond the Tech City and other areas that traditionally had a strong presence of media and knowledge companies (such as Soho and London Bridge). New clusters have emerged in Stratford, Tottenham, and New Cross. These areas increasingly cater to the property requirements of small and medium-sized businesses, which made up 47% of all transactions during the first quarter of the year. The current floor space supply is set at 6.7 million square feet and vacancy rates average 6.9 per cent. The top rents achieved during this quarter reached £70 per square foot.
Office market trends
Availability has come under pressure due to the large number of commercial-to-residential conversions and to the significant level of commercial property being held as long-term assets. This is particularly the case in high-value areas like St James or Mayfair, where up to 80 per cent of the office floor space is locked up by investors.
On the positive side, we can highlight the successful redevelopment of the King’s Cross – Euston corridor, also known as the Knowledge Quarter. Here, more than 350,000 square feet of commercial floor space have been taken up in a single transaction, the sub-lease of 6 Pancras Square. According to GVA Research, prime office properties in Camden and King’s Cross have experienced large increases in rental values, driving occupiers out and towards nearby locations like Clerkenwell and Shoreditch, where rents average £57.50/sq ft. Rents in Midtown range between £62.5 and £72.5/ sq ft. Continue reading “Overview of London’s Commercial Property Market – 1st Quarter 2015”
When a company relocates to new business premises, they may also relocate their employees. From time to time, companies may also be required to relocate staff to other cities or countries. This might be the result of opening a new office or trying to meet operational requirements by having enough resources in different locations. Companies need to consider the rights of their employees when relocating people. At the same time, employees need to understand conditions of their employment contract when they are asked to move.
Whenever a company relocates, employers are responsible for ensuring the rights of their employees are respected. This includes respecting the terms of any mobility clause in an employee’s contract. A mobility clause outlines the conditions and limits when an employee must move. This clause normally allows companies to force their workers to move, in accordance to the terms outlined in the clause. Employers are not required to provide compensation for employees if they relocate, unless this is identified in the employment contract. Employers must ensure that any request to move is reasonable. For example, asking an employee to relocate outside of the UK with only one day’s notice or if the move would affect the employee’s children’s education would not be considered reasonable requests.
It is important for employees to fully understand their employment contract and mobility clause, if present. Any employee with a mobility clause in their contract must move at the request of their employer unless they prove that the request to relocate is unreasonable. If proven that the move is unreasonable, the clause may not apply and the employee can request alternative arrangements. Employees without a mobility clause have the option to choose whether or not they wish to move. Continue reading “Company Relocation: Relocating People & Employees”
In close proximity to London’s major financial district Bishopsgate, Whitechapel is quickly rising as a prominent spot for growing businesses. Alongside this excellent locale, Whitechapel is serviced by numerous travel links. Using these links – whether taking the one of the numerous bus lines that service the area or hopping on the underground – Liverpool Street is only 6 minutes travel, while Canary Wharf is only 20. Another advantage of the Whitechapel area is that, as it is approximately three and a half miles from the city centre, the majority of it is outside the congestion area.
The current position of London office space has reached a plateau after a period of growth following a stagnant period. Confidence in the London market remains at a comfortable high, despite the general referendum occurring in 2015. However, as construction rates begin to level off, West End rental rates have begun to rise significantly. As a result of this, many new and already established businesses look to areas of London which have been previously undiscovered – such as Whitechapel. Having transport services to the city centre and other business parks as easily found as those in Whitechapel makes this region an in-demand location. Continue reading “London Office Space Growth Areas 2015: Whitechapel”
Despite high political tensions in 2015 as general and mayoral elections loom – and particularly as the EU referendum comes ever closer – confidence in London as a commercial hub appears to remain stable. However, construction levels are slowly coming to a standstill as projects finish and no new ones begin, causing rental rates in the West End to begin rising significantly. As such, businesses looking for commercial property in London are beginning to broaden their horizons in terms of office markets.
London office space rates remained at a steady level in 2014, with investments totalling just under £20 billion being pumped into the sector. That being said, 2014 ended with some surprises as some of London’s ‘trophy assets’ were seen to change hands – for example the famous Gherkin, which was purchased last year by the Brazilian/New York dynasty Safra. Indeed, with rental prices continually on the increase, a second surprise was seen as some of the previously more obscure sub-markets of London began to billow with success. Continue reading “London Office Space Growth Areas 2015: King’s Cross”
There is a wealth of opportunities to learn about London’s property market through conferences and other forums in the capital. These gatherings bring together practitioners, policy and decision makers, investors and others. They are opportunities to network and build relationships, while also making deals with new partners and investors.
The RICS Commercial Property Conference on 27 November 2015 provides market insight through keynotes and panels. The second edition of the conference is also an opportunity to debate macro triggers that impact property market growth. In 2014, speakers included GVA Chief Executive Rob Bould, real estate columnist Peter Bill, Legal & General Property Managing Director Bill Hughes, and Union Investment Real Estate’s Head of Investment Management International Martin Brühl. Other speakers represented leaders in the market, including Deutsche Bank, Segro, DTZ, Grosvenor and more.
The Royal Institution of Chartered Surveyors (RICS) stages a variety of conferences, seminars and workshops in London each year. Established by Royal Charter, RICS accredits some 118,000 professionals around the world. More than 50 RICS conferences and seminars are scheduled in London throughout 2015, including events that delve into dispute resolution, construction regulations, contract negotiation, and more. RICS will also organise the RICS Building Surveying Conference on 23 April 2015, the RICS Property Leaders’ Summit on 5 June 2015, and the RICS Residential Conference on 2 July 2015. To learn more about RICS conferences and other events in 2015, visit www.rics.org/uk/training-events. Continue reading “London Commercial Property Conferences, Events and Meetups for 2015”
Are you planning to do business in Lambeth and Southwark? Office space in the two London boroughs are plentiful, with the advantage of being in close proximity to the iconic London Eye, the Southbank cultural area, and within a quick walk of London’s vast bus, rail and tube network.
Major Industries and Employers in Lambeth and Southwark
Two of the biggest employers in Lambeth and Southwark are NHS foundation trust hospitals. Guy’s Hospital at London Bridge, and St Thomas’ Hospital at Waterloo are two of the largest in London, servicing the South East boroughs. The Novotel London Waterloo in Lambeth Road puts a premier hotel establishment in the vicinity, which is attractive to business travellers. Shakespeare’s Globe Theatre, the Tate Modern, Borough Markets, The London Eye, and surrounding retail and restaurant establishments provide a flourishing local employment market. Easy access to the Palace of Westminster and surrounding offices makes locating in Lambeth and Southwark attractive for businesses.
More famous office space for let in Lambeth and Southwark is The Shard, London’s tallest building, and a design icon. Other buildings include Westminster Business Square, Chester House (within the huge Kennington Business Centre complex), Southbank House, Lincoln House and Union Court (to name a few).
New Developments Planned for Lambeth and Southwark Business Area Continue reading “Focus on Business in Lambeth and Southwark”
As one of the world’s leading commercial and economic powerhouses, the city of London attracts thousands of entrepreneurs and investors every year. According to a recent report, in the Tech City alone more than 15,000 new businesses were established during 2013, and this has prompted a surge in the demand for adequate office premises in this London neighbourhood. There are many other areas of London that are also experiencing a growing shortage of office floor space, mainly those in the northern city fringe area and in central London, where new developments are severely limited.
Continue reading “Serviced Office Space to Become More Popular in 2015”
The London commercial property market is expected to show positive results in 2015. During the last year, office property market sector has shown of a number of trends including accelerated rental growth, declining vacancy rates, and stable investment yields are some of the key trends that have characterized the office market across most London areas over 2014.
The key trends expected across the London office space rental market include increased demand, vacancy rates as low as 4.5%, an increase in rental costs across London up by 4.3% overall and the commercial property market as a whole expected to experience double digit growth.
Expected London Office Market Growth Areas in 2015
Last year was undoubtedly a positive year for landlords and tenants in the London commercial property market. Towards the end of the year, real estate experts released their forecasts for 2015. The predictions are full of positive and encouraging figures and point at a healthy market where growth is set to dominate. Take a look at some of the most important trends regarding the key growth areas for the commercial property market in London during 2015.
2015 Outlook: What landlords and investors need to know
According to market analysts at Schroders, during 2015 a number of factors will result in a very attractive property market for landlords and investors interested in London properties. A recovering economy, decreasing unemployment rates, and a limited development pipeline are set to drive demand for existing floor space and to push commercial property values even further. For investors, this means that property yields can reach double digit levels, although all the predictions point at the commercial rental market as the best performing over the next 12 months. According to data from the Investment Property Forum Consensus Forecast, total returns could be as high as 15 per cent during 2015. Rising interest rates are not expected to become a possibility until 2016.
Continue reading “London Office Space 2015: Expected Growth Areas”
Situated in the East End of London, Shoreditch is synonymous with the capital’s high tech sector. This change has had a significant impact on the types, quality, quantity and price of available offices and coworking spaces in Shoreditch.
The district is located within the London Borough of Hackney, just north of the City of London. Once an industrial and working class area, Shoreditch has gentrified significantly with the influx of creative and technology industries and their employees. Today, the district is home to many art galleries, bars and restaurants.
Continue reading “Tech & Creative Industries Change Shoreditch’s Commercial Property Market”