June 22, 2016

Brexit uncertainty leads to drop in cost of living rankings for UK cities ⁰

by Sara Bean • Cities, Facilities management, News, Property

UK cities have dropped down the ranking in Mercer’s annual Cost of Living Survey this year as Brexit fears weaken the value of the Pound, whilst the Euro stays strong against the Dollar. Although the UK’s capital remains in the top 20 costliest cities worldwide, London (17) has dropped five places, whereas Aberdeen (85) and Birmingham (96) have fallen seven and 16 places respectively. Further down the list, (119) has dropped 10 places and Belfast (134) three. The survey finds that factors including currency fluctuations, cost inflation for goods and services, and instability of accommodation prices, have all contributed to the cost of expatriate packages for employees on international assignments. Mercer’s survey covers 209 cities across five continents with Hong Kong ranking highest, pushing Luanda to second place. Ranking 3rd, Zurich is the most expensive European city, followed by Singapore (4) and Tokyo (5).

June 21, 2016

Tech unicorns thrive in Europe and UK leads the way, claims report ⁰

by Mark Eltringham • News, Property, Technology

Fortune magazine begs to differ, but Europe as a whole is a seemingly fertile breeding ground for ‘tech unicorns’, according to a new report from technology investment bank GP Bullhound. Defined as technology startups with a market valuation of more than $1 billion, the report claims that there are now 47 so-called unicorns in Europe, up by 10 from last year. The report also claims that the UK is leading the way within Europe, with 18 out of the 47 based in the country with new entries such as Blippar and Anaplan. The European firms have a combined value of $130bn, and ‘have demonstrated resilience in the face of turbulent global markets and heightened scrutiny of fast-growth tech’. Sweden is the country with the second highest number of billion-dollar tech companies (7), including Spotify (pictured), Europe’s most valuable Unicorn. Germany is third with six and France with three. Oddly, the report also includes Israel which has three unicorns.

June 21, 2016

London office rents predicted to stay strong provided there’s no Brexit ⁰

by Sara Bean • Cities, Facilities management, News, Property

The continuing imbalance between the supply and demand for office space throughout London is resulting in a shift in the balance of negotiating power away from tenants, according to the latest London Office Update from Carter Jonas. Rents across Central London have, on average, risen by over 50 percent over the last five years in the West End, Midtown and South Bank office markets, and by over 30 percent in the City of London. Rent free periods have typically fallen by up to six months over the same period. In the next 18-24 months, the trend will continue to be higher rents and shorter rent free periods as availability remains low. While some occupiers may leave London altogether, others may adopt a ‘spoke and hub’ strategy, whereby back office functions relocate to peripheral, lower cost, areas while ‘client facing’ operations are retained in Central London. This prediction assumes that Britain rejects Brexit however, and there are no major economic shocks.

June 16, 2016

London market for flexible workspace outstrips conventional space ⁰

by Sara Bean • Cities, Facilities management, Flexible working, News, Property

The UK market for flexible workspace has grown 11 percent in just the last 12 months. The main driver of the upsurge is inevitably London, which saw the biggest increase of flexible space at 16 percent and now represents a third of the whole UK market. According to the new research by The Instant Group, traditional occupier inquiries for London grew at a lower rate (nine percent), meaning the supply of flexible workspace in London has outstripped conventional office space by some margin over the last year; a trend the report suggests that seems set to continue into the future. Double digit growth for flexible workspace was also been seen across the UK’s regions, with suburban locations seeing some of the UK’s most aggressive growth in terms of workstation rates and inquiries, despite a 12.5 percent increase in supply, as occupiers have chosen cheaper locations with good transport links over the highly competitive market in central London.

June 15, 2016

Edinburgh most attractive city for commercial property investors outside London ⁰

by Mark Eltringham • Cities, News, Property

Edinburgh is the most attractive British location for commercial property investment outside of London, according to new research by law firm and real estate consultancy Morton Fraser. Research amongst investors by the law firm’s commercial real estate division ranks a list of ten British cities outside of London according to their attractiveness as investment options. Edinburgh, Bristol and Manchester are the most appealing regional locations for investors, based on an indexed score of how many more investors found them attractive propositions compared to those who did not. However, the remaining seven cities did not appeal to the majority of investors, with more rating them an unattractive investment proposition rather than an appealing one. Aberdeen is rated the least attractive location for investors, coming after its energy-dependent economy was hit by falling oil prices, leading to thousands of job losses and the contraction of the oil and gas industry.

June 15, 2016

Tech sector drives demand for office space in London’s City fringes ⁰

by Sara Bean • Cities, News, Property, Technology

London’s City Fringe market, the once ‘cheap’ office location of Central London has matured into a leading global tech address and, with a number of new mixed use developments underway and more planned, its success is set to continue. According to data from Savills, average Grade A rents in the area have increased by 87 percent in the last six years with the best new office space now trading at a discount of only 3.5 percent to the same quality of building in the City Core (a saving of circa. £1 per sq ft). According to Savills research, the first quarter of 2016 saw average Grade A rents in the City Fringe reach £59.42 per sq ft (compared to £61.60 per sq ft for non-tower Grade A office buildings in the City Core). This pattern is accelerated by new office developments including Derwent’s White Collar Factory and Helical Bar / Crosstree’s Bower Development, both EC1, and key deals to Adobe, BGL Group, Stripe Limited and CBS Interactive.

June 14, 2016

JLL survey claims occupiers and investors think voters will shun Brexit ⁰

by Mark Eltringham • News, Property

According to a new survey from JLL of top international corporate occupiers and UK-based investors into their business attitudes to the EU referendum, 80 percent held the view that the UK will vote to remain in the EU. The survey claims that investors are less fearful of impact of Brexit on their long term property strategies than corporate occupiers and that the London office market is viewed as the property sector that would be most impacted by a vote to leave. The survey also revealed attitudes of corporates and investors to future property market decisions in the event of a Brexit. 60 percent of the investors surveyed felt that there would be no changes to their property strategy in the short or long term as a result of a leave vote. Only 30 percent expect reduced allocations in UK property. Of the corporate occupiers surveyed, almost half foresaw they would need to review their UK business space in both the short or long term.

June 14, 2016

UK leads the world in serviced offices and demand is set to rise ⁰

by Sara Bean • Facilities management, Flexible working, News, Property

The UK is the leading global serviced office sector, with the largest and most mature market, accounting for over a third (36 percent) of the worldwide serviced office footprint, according to a new report commissioned by serviced office group Office Space in Town. The UK serviced office market has grown by 31 percent since 2008, and it is projected to increase in value significantly by 2025, to £62 billion on conservative projections and £126bn on more optimistic forecasts. There are three key drivers behind its rise: increasing numbers of growth businesses, expansion of key sectors that use serviced offices and the trend towards more flexible working. There are sound economic and business behavioural reasons to believe this growth in demand for serviced offices will continue over the next decade. This, in part, will come from growth in small firms and business start-ups, which comprise a large share of current serviced office users.

June 10, 2016

Plans unveiled to double size of MediaCityUK over the next ten years ⁰

by Sara Bean • Cities, Facilities management, News, Property

MediaCityUK, best known as the new home of the BBC, is to double in size over the next decade under ambitious plans submitted to Salford City Council. Up to ten new buildings are envisaged with a development value of more than £1 billion. Key features of phase two of MediaCityUK include 50,000 m2 (540,000 sq ft) of offices, 1,800 apartments, retail and leisure, complemented by public spaces with a pedestrian promenade running through the scheme. Outline approval for the plans was granted in 2006. A condition of that permission was that detailed proposals, including all building designs and specifications, needed to be brought forward this year. The plans are expected to be considered by Salford’s planning panel in September. MediaCityUK is a joint venture between Peel Land and Property and Legal and General Capital, who share a long-term commitment to the further expansion of a creative and digital hub which already houses 250 businesses including the BBC, ITV, dock10, Ericsson and SIS.

June 9, 2016

Commercial real estate investment strong despite Brexit-related slowdown ⁰

by Sara Bean • Cities, Facilities management, News, Property

Partly due to the uncertainty leading up to the EU referendum, employment intentions within Financial and Business Services (FBS) have slowed, but rental growth within the commercial property sector should remain healthy, particularly if the ‘remain’ vote prevails, the latest Real Estate investment forecasts from Colliers has revealed. Offices will continue to drive rental growth across the commercial property sector and it’s expected that rents will rise by 6.8 percent this year and average 3.9 percent in 2016-2020. Although it’s slowed a little, Central London will continue to attract demand and push the overall rate up, with a still strong growth of 8.4 percent in 2016. In addition, the artificial barriers between individual London ‘villages’ are increasingly breaking down, creating a fluid market for office occupiers in the capital, with more options for geographical relocations and expansions. This will continue to benefit the Rest of London, which is expected to see rents increase by 8.1 percent this year.

June 8, 2016

Mayor of London moves to open up more office spaces for startups ⁰

by Neil Franklin • Cities, Flexible working, News, Property

It is telling that one of the first issues to be addressed by incoming London Mayor Saddiq Khan is the problem the capital’s thriving startups have in simply finding a place to work. Although the measures outlined in the new London Plan are aimed primarily at addressing London’s housing crisis, they also include measures to deal with the reduction in the amount of viable office space available following the relaxation of planning rules which allow developers to more easily switch existing office stock to residential use. The costs of office space in London is a growing concern for all sectors, but falls especially hard on startups. According to a recent study by SpareOffice, even the use of coworking space is an issue, with average monthly fees of £357 per person. Now the mayor has announced that he will put new measures in place to help protect and expand office space for small businesses, start-ups and entrepreneurs in London.

June 4, 2016

Robot woes + Coworking goes mainstream + Workplace sit-stand debate ⁰

by Sara Bean • Facilities management, Flexible working, Newsletter, Property, Technology, Wellbeing, Workplace

In this week’s Newsletter; Sara Bean suggests improvements in work-based training could help address the productivity gap; Mark Eltringham says there will be no grand arrival for the ‘Office of the Future’; and warns of the lack of context when reporting research on sit-stand working. Better technology would improve workers quality of life, finds a new report; researchers say workaholism is closely associated with a range of mental diseases and psychiatric disorders; and a surprisingly large number of people fear their job being taken by a robot within the next 10 to 50 years. Banks are rationalising space to stay in London; coworking remains one of the main drivers of workplace change globally; and uncertainty about Brexit hits the construction sector. You can download our Insight Briefing, produced in partnership with Connection, on the boundless office; visit our new events page, follow us on Twitter and join our LinkedIn Group to discuss these and other stories.