Property and Construction
January 31, 2017
London continues to be the region with the highest number of advertised vacancies (248,605) and the highest average salaries (£38,449), but its previously unassailable supremacy may soon be challenged, a new survey suggests. According to the latest UK Job Market Report from Adzuna real-time jobs data average salaries in the capital have fallen more (-3.9 percent) than any other region in the UK in the past year as salary growth in the rest of the UK catches up at a more consistent rate. This also represents a wider shift in the jobs market as the Government creates a solid post-Brexit UK economy that drives growth across the whole country. It is likely growing trends such as companies relocating their headquarters to cities outside the capital such as Manchester will continue as well as reinvestments into northern powerhouses to revitalise former struggling areas and industries. With competition for jobs per jobseeker per vacancy rising from 0.43 to 0.45 in January, jobseekers in the capital may have two hurdles ahead in the shape of a more competitive job market and pedestrian salary growth.
January 30, 2017
The UK Government’s groundbreaking One Public Sector Estate (OPE) project now includes around three quarters of the country’s local authorities following the announcement that a further 79 councils will join the programme. One Public Estate is a national programme jointly run by the Cabinet Office Government Property Unit and the Local Government Association (LGA). It supports joint working across central and local government to release land and property and boost economic growth, regeneration and integrated public services. It encourages public sector partners to share buildings, transform services, reduce running costs, and release surplus and under-used land for development. Partnerships joining the programme will receive funding and practical and technical support to unblock barriers and deliver ambitious ‘transformational projects’.
January 26, 2017
Demand for commercial property in the UK continues to grow even as the country prepares to leave the European Union, according to the latest quarterly Royal Institution of Chartered Surveyors (RICS) market survey. The report for Q4 2016 suggests that a large proportion of the increase was linked to the attractiveness of UK commercial property for foreign investors. But there are signs of trouble ahead, as the report acknowledges some negative expectations for London commercial property values amid fears the capital will bear the brunt of any Brexit-led departure of firms. Over the fourth quarter, overall investment enquiries were flat in the London office sector. Although the UK market has largely recovered from its post-Brexit slump, London has underperformed the wider market, with some projects being put on hold, property companies cutting rental growth forecasts and rents beginning to stagnate.
January 24, 2017
Amos Tversky and Daniel Kahneman introduced the concept of Loss Aversion in 1984, highlighting people’s tendency to strongly prefer avoiding losses to acquiring gains. Most studies suggest that losses are twice as powerful, psychologically, as gains. Lose £100 and we will feel a remorse that easily outweighs winning £100. In a similar fashion we find it very hard to see future positives when confronted with short term loses. We understand easily what we have lost but cannot imagine what there is to be gained. Furthermore, as Frederic Bastiat wrote in an 1850 paper, “That Which is Seen, and That Which is Not Seen”, man has a tendency to “pursue a small present good, which will be followed by a great evil to come, rather than a great good to come, at the risk of a small present evil”. Put these together and it is no wonder that, by and large, the future of work, corporate real estate and the workplace is so widely misunderstood.
January 23, 2017
Visitors to Barcelona may still see Jean Nouvel’s iconic, phallic Agbar Tower as a welcome sight on the city’s skyline, but the building is less loved by its owners and tenants according to a report in Spanish newspaper El Pais. Inaugurated in 2005, the 34-storey skyscraper has been sold twice in three years as tenants have vacated and plans drawn up to either refurbish it or turn it into a hotel. The latest plan from new owners Merlin Properties is to spend €13 million on a refurbishment that will include a multi-occupier space for companies working in Barcelona’s thriving tech sector, centred on the Innovation District that is home to the Torre Agbar. The refurb aims to deal with the most common complaints from previous tenants which, according to the report, include a dysfunctional doughnut shaped layout, poor sightlines, inappropriate location, small windows with no view, inadequate shutters and an unwillingness to work in a building with such an overwhelming brand identity. Image: Ralf Roletschek
January 13, 2017
Although the world’s major corporate real estate occupiers retain a focus on managing the costs of their workplace when it comes to making the big decisions, there is a growing emphasis on offsetting this against issues such as staff recruitment and retention. That is the key finding of a new report from Cushman & Wakefield into the priorities and decision making of large corporate occupiers. It claims that firms are now far more focused on striking the right balance between goals that are often in direct opposition to one another. The study, produced in partnership with CoreNet Global, was based on interviews with 266 occupiers, three quarters of whom have more than 25 offices worldwide. The survey examined not only how location and workplace strategy are viewed as corporate value drivers, but also CRE’s alignment with business strategy.
January 4, 2017
A new survey commissioned by relocation firm Saunders 1865 claims that fears of a mass exodus of UK businesses in the wake of the Brexit vote are unfounded. Its study of 100 UK based multinationals with up to 350,000 employees found that none are planning to relocate their main operations overseas as a result of Brexit. Respondents included banks, consulting firms, technology companies and other organisations with a global presence. The study concludes that this indicates that the UK remains an appealing location within which to base international business. Saunders 1865’s CEO, Tony Coe said, “While anecdotal evidence from corporate clients suggested that the reports of a post-Brexit exodus by companies were overblown, we were frankly shocked that we didn’t receive a single response indicating that a move out of the UK was even being considered.”
January 1, 2017
WeWork is the weather vane for a new era in which property is increasingly consumed as a service. The company has issued a statement looking back over its achievements during the past year. It’s a tale told in numbers so makes interesting reading. The firm claims it has added 58 new spaces and now offers over 110 locations open around the world for its 80,000 members. It has opened spaces in 18 new cities including Berlin (Berlin), Beer Sheva, Seoul, Mexico City, Shanghai, Hong Kong, Montreal, Philadelphia, Atlanta, Denver and Sydney. Perhaps most tellingly, it has extended its client reach to include firms such as Microsoft, HSBC, Bacardi and Samsung. There’ll be lots of people offering up lists at this time of year detailing key workplace trends. Few will be as instructive as the numbers coming out of WeWork and the wider coworking movement.
December 20, 2016
A rise in the cost of renting commercial property in Bristol is being driven by increased demand from TMT, professional and energy occupiers looking for office space in the city, with take up levels of Bristol city centre offices predicted to reach 800,000 sq ft (74,322 sq m) in 2016. This is 50 percent above the five year average of 533,000 sq ft (49,517 sq m), according to Savills. This influx has resulted in a significant decrease in the supply of city centre Grade A stock, with levels currently at 117,116 sq ft (10,880 sq m). In order to cope with the demand landlords, particularly those with TMT tenants are refurbishing their offices, with the refurbishment/redevelopment pipeline at an estimated 300,000 sq ft (27,871 sq m). Savills notes that as a result of increased demand rental growth has been seen in both Grade A and B stock in Bristol. Refurbished office space is now reaching rents of £27 per sq ft (£291 per sq m) in Grade B stock, just below the headline rent of £28.50 per sq ft (£307 per sq m). It is predicted that in 2017 rents on Grade A space will reach and exceed £30 per sq ft (£323 per sq m).
December 14, 2016
London commercial property has managed to weather the Brexit storm with a late surge of City deals over the past three weeks set to see Central London take-up in line with its long-term average level of 10 million sq ft in 2016. According to the latest figures from JLL, despite take-up in Central London being subdued in the lead-up to and immediate aftermath of the referendum, City take-up has surged during the last quarter, and is expected to reach 5.3 million sq ft by year end, just 6 percent below the long term average. This is offset by strong take-up in East London, where the recent deal to the GPU at Canary Wharf propelled take-up to 8 percent above its long term average level. The most notable deals of 2016 included – The Government Property Unit (GPUK) took 542,000 sq ft at 20 Cabot Square, E14 which was a sub-lease from Barclays; Apple pre-let 500,000 sq ft at Battersea Power Station, SW8 and will be paying a rent in the high £50 per sq ft; Thompson Reuters acquired 315,362 sq ft at 5 Canada Square, E14, paying a rent of £40 per sq ft; 33 Central, EC4 was pre-let to Wells Fargo who took the entire building, totalling 227,689 sq ft and New Look pre-leasing 127,096 sq ft at R7 Handyside Street, N1C for £77.50 per sq ft.
December 13, 2016
The culture within which we work determines how effective, successful, fulfilled and well we are in both our professional and personal lives. The organisations for which we work – on whatever basis that might be – the physical surroundings they create, and the other places in which we choose to work are now woven into the fabric of our lives as never before. The technological immersion that allows us to work in new ways also means that each day becomes a series of experiences. Because we are free to work wherever and whenever we choose, we are increasingly able to determine the nature of those experiences. For those who design and manage offices this represents both a great opportunity and an unprecedented series of challenges.
December 9, 2016
Major companies including Barclays and Vodafone were among more than 40 leading businesses, universities and business networks which pledged their support and backed the promotion of the Northern Powerhouse economy during a ’partnership’ conference held in Liverpool yesterday (8 December 2016). The North has over one million businesses, seven international airports and four of the world’s top universities, the conference heard. Its economy was worth £304 billion in 2014, similar to the whole of Belgium, while last year employment growth in the North East was the fastest in the UK. To help support the initiative a new dedicated Northern Powerhouse website has been launched to share the latest news, views and opportunities for established businesses and new investors. In addition, a Northern Powerhouse Partnership Programme aims to encourage businesses to focus on the key strengths and areas of development across the North – from connectivity to transport, skills to science and from culture to devolution. more…