Modest growth in UK construction activity is driven by commercial office projects

Modest growth in UK construction activity is driven by commercial office projects

Modest growth in UK construction activity driven by commercial office projects

Construction activity in the UK has stabilised after a prolonged period of decline, according to the latest JLL and Glenigan UK Commercial Construction Activity Index. Key findings for the last quarter of 2017 show an overall increase in construction activity for the second consecutive quarter, driven mainly by commercial office developments. This follows overall growth of 7.9 percent in the third quarter of 2017, halting a sharp decline seen since mid-2015. Highlighting movement across different sectors, growth in office construction was up 11.2 percent to £4.5 billion, education (up 12.0 percent to £3.5 billion) and community (up 19.9 percent to £0.6 billion) sectors.

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Commercial office market take-up in Birmingham has exceeded one million sq ft

Commercial office market take-up in Birmingham has exceeded one million sq ft

Three Snowhill in BirminghamCity centre take up reached 1,005,000 sq ft in Birmingham last year, 51 percent above the 10-year average of 666,000 sq ft which marked a record year, according to Savills Research. Growth was driven in part by the Government Property Unit (GPU) deal, as public services accounted for 27 percent of take-up in the city centre last year, including the 237,000 sq ft pre-let at Arena Central. Birmingham’s boom was also boasted by take-up from serviced office providers that reached 208,000 sq ft during 2017, the highest level on record and this accounted for 21 percent of the total take-up, more than any other regional city. There now remains a shortage of Prime Grade A space in Birmingham city centre following a number of large lettings. Prime Grade A space now stands at only 169,000 sq ft, enough for only six months of take-up at average levels. Major construction project, Three Snowhill won’t complete until the second quarter of next year, when it will deliver 420,000 sq ft of much needed Grade A office space on its completion. Until then, competition among occupiers will further intensify for Grade A space.

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Occupiers incorporating third-party agile space into their real estate strategy

Occupiers incorporating third-party agile space into their real estate strategy

Occupiers increasingly incorporate third-party 'agile space' into their real estate strategyCorporate real estate departments need to become more effective partners in the agile transformation of their broader organizations., claims a new survey conducted by CBRE, in partnership with CoreNet Global. When describing Portfolio Agility, i.e. the ability to rapidly adapt, scale and reposition the organization’s real estate portfolio to support shifting enterprise needs, 67 percent consider portfolio agility as the most important type of agility for business success, yet only 14 percent consider themselves highly agile in this area. The most prevalent portfolio agility practices included negotiating flexible space options in the lease, seeking shorter and/or more flexible lease terms, supporting an enterprise-wide flex-work program and delivering free address work environments. The report states that new workplace guidelines for efficiency have altered the way companies plan for density and more occupiers are incorporating third-party ‘agile space’ into their overall real estate strategy.

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Investment in UK commercial property sector remains strong

Investment in UK commercial property sector remains strong

Investment in UK commercial property rose 66 percent in January compared to the same month last year, according to data from Savills, to £4.2 billion. In its February Market in Minutes report the international real estate advisor says that investor appetite for UK property remains very strong. In 2017, total investment into UK real estate reached £65.4 billion, representing a 26 percent increase on 2016’s annual total. According to Savills, the office and industrial sectors led the way, with overseas investors responsible for nearly half of total volumes, of which Asian investors were the most active, accounting for a fifth of all investment.

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Brexit and rising property costs lead one in five businesses to consider move away from London

Brexit and rising property costs lead one in five businesses to consider move away from London

Uncertainty surrounding Brexit, rent rises in a city already renowned for its high property costs and business rate rises mean that one in five London-based businesses have either already relocated or are consider moving to a new location, according to a new survey from the London Chamber of Commerce and Industry. The survey of 577 businesses found that some businesses were having to look at relocating to a different part of London while others were looking to move out of the capital and others out of the UK entirely. The survey, carried out by Comres, found that 22 per cent had moved or were planning to relocate because of Britain’s decision to leave to the EU, 21 per cent because of rent rises and 19 per cent because of rising business rates. When it came to moving because of Brexit, found 11 per cent of London-based businesses had considered leaving the UK and 2 per cent had already done so.

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SMEs spend more time searching for private offices than coworking space

SMEs spend more time searching for private offices than coworking space

Second Home coworkingSearches for private offices have become more popular than coworking space among SMEs over the past year, according to new data from commercial property marketplace Hubble. The firm reports that this marks a reversal from the previous year’s results, although searches for coworking space remain disproportionately high compared to the overall office market. According to Hubble, searches for private offices grew an average of 40 percent month-on-month from January 2017 to January 2018, with 43 percent more searches being made for private offices over coworking space, and searches for the category ‘private office’ comprising 62 percent of all searches on the Hubble platform.

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London office market is booming and proving resilient in the face of Brexit

London office market is booming and proving resilient in the face of Brexit

A new report from Knight Frank claims that activity in the office market in London increased sharply last year, which the property adviser said was driven largely by growing demand from the UK’s burgeoning tech sector. The report said office leasing activity in central London hit 13.84 million sq ft last year, more than 2 million sq ft than in 2016. Knight Frank said it had seen ‘extraordinary demand’ for London offices from the Technology, Media and Telecommunications (TMT) sector. However, the report also claims that there is now a lack of quality office space supply because, despite the fact that more than 259 development schemes are under construction in Central London, 187 are residential, and of the remaining 72 offering commercial space, only two-thirds are available to lease, with many of them already pre-let to office tenants.

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Record office take up in Edinburgh last year, boosted by burgeoning tech sector

Record office take up in Edinburgh last year, boosted by burgeoning tech sector

Mint building in Edinburgh Demand for office space in Scotland’s three largest cities pushed overall take-up beyond 2m sq ft last year, aided by a solid final quarter of occupational deals in Aberdeen and Glasgow, and an all-time record year for Edinburgh. Scotland’s offices market in 2017 reach ed2.4 million sq ft, 14 percent above the 10 year average, according to the latest Scottish Office Spotlight from Savills. In Edinburgh (city centre and wider market) office take-up amounted to a record 1.1 million sq ft boosted by the ongoing growth of tech in the city. According to data from Stack Overflow, the Scottish capital saw a 19 percent increase in data scientists employed in the city centre over the course of 2017. Activity places further pressure on supply with only 220,000 sq ft of Grade A now available which Savills suggests will push top rents to £34 per sq ft in 2018. Keith Dobson, director in the business space agency team at Savills in Edinburgh, says: “The soon to be completed 40,000 sq ft office scheme at 2 Semple Street will ease pent up demand come Q2 2018, whilst The Mint Building and Capital Square will complete in 2019 and 2020 respectively.”

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Green buildings provide billions of dollars in additional benefits, claims Harvard study

Green buildings provide billions of dollars in additional benefits, claims Harvard study

A new sponsored study from researchers at Harvard University claims that green buildings deliver billions of dollars of social and health benefits beyond those associated with reduced energy consumption. The researchers examined a subset of green-certified buildings over a 16-year period in six countries: the U.S., China, India, Brazil, Germany and Turkey. The study identified nearly $6 billion in combined health and climate benefits. The results are published in the peer reviewed Journal of Exposure Science & Environmental Epidemiology.

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Rent falls due to Brexit and concerns about oversupply of serviced offices in London

Rent falls due to Brexit and concerns about oversupply of serviced offices in London

There have been 18 months of faltering net effective rents within the commercial office market in the Capital since the Brexit referendum, with ten of the 18 Central London office submarkets monitored in Cluttons’ latest London Office Market Outlook report registering rent falls in the final quarter of 2017, buoyed by additional incentives such as contributions to fit out costs and even delayed completions becoming commonplace in many locations.  The report also raises concerns about the potential for an oversupply of serviced offices within the Capital. However, despite this and a perception that Central London offices are currently fully prices or possibly over-priced, by both occupiers and domestic investors, London remains a resilient city, continuing to attract high volumes of overseas capital. Employment growth is of course expected to be influenced by both the levels of GDP growth during 2018 and the Brexit divorce proceedings, which in turn will affect rental values. But says the report, aside from concerns over Brexit, there is no evidence from recruitment agencies to suggest a current, or planned exodus of finance and banking professionals from the City.

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Creators of the Edge in Amsterdam to develop new generation of Smart buildings

Creators of the Edge in Amsterdam to develop new generation of Smart buildings

The Edge in AmsterdamThe creative team behind the development of the world’s most sustainable building – The Edge in Amsterdam – has announced the launch of a real estate technology company. EDGE Technologies, launched by OVG Real Estate CEO Coen van Oostrom will focus on creating a new generation of buildings which feature the latest innovations in sustainability and wellbeing. Whereas parent company OVG is focussed exclusively on the development of its existing portfolio, EDGE Technologies will focus on both the development and the long-term operations of this new generation of buildings, aiming for a cohesive experience across cities. Each EDGE building will be built and operated on the same technology platform and offer consistent user-centred design, created to serve the needs of today’s fast-changing and demanding workforce. To help achieve this the new company is launching a product that will capture and aggregate data across its properties in order to optimize, measure and inform both the user experience and the building’s environmental performance.  More →

Plans to develop 2 million sq. ft. of office space in South East England announced

Plans to develop 2 million sq. ft. of office space in South East England announced

Property developer John Baker, formerly of Baker Lorenz, has launched a new venture to develop a series of new business districts in South East commuter towns and outer London boroughs.  The John Baker Group is working in partnership with building and civil engineering contractor Sir Robert McAlpine on the £2bn project which will see the delivery of some 2 million sq. ft. of new office space across the South East. The joint venture, called The Commercial Parks Group, has already acquired £20m worth of property in Crawley, Haywards Heath and Bromley in order to create a series of major business hubs.

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