November 4, 2015

Commercial property owners not keeping up with changing needs of tenants ⁰

by Mark Eltringham • Flexible working, News, Property, Workplace design

A new study from Northumbria University, sponsored by serviced office provider Citibase, claims that the owners of commercial property in the UK stand to lose out on £4.8 billion over the next decade because they are failing to adapt to the changing needs of tenants for more agile spaces. The study claims that property owners in 27 towns and cities in England, Wales and Scotland are already missing out on £325 million annually and paying out another £170 million on holding cost and there are stark differences between the prime and secondary office sectors. The report, Taking Stock: Secondary opportunities and the agile future, claims that out of all total empty stock calculated, only 10 percent of vacant office space is prime, the other 90 percent is secondary. The secondary sector currently has an estimated 26.4m sq ft of office space vacant compared to just 3m sq ft of empty stock in the prime market.

November 3, 2015

Less than one year’s supply of office space now available in Central London ⁰

by Sara Bean • Facilities management, News, Property

Office occupiers are being forced to search further afield from traditional London commercial property centres as the vacancy rate of office space in Central London falls to a 15 year low. According to research from BNP Paribas Real Estate, at just 4.68 percent of total stock, the level of supply during the third quarter of the year was just 10.29m sq ft; equivalent to less than one years’ supply at current levels. Take-up to the end of September reached 10.78m sq ft, 18 percent above the long term trend, whilst the investment volume of £11.91bn is 28 percent ahead of the average. The West End’s office market was boosted by several large transactions involving Media Tech firms and take-up in Q3 2015 reached 1m sq ft, making the third quarter the busiest so far in 2015. The City is still attracting media tech companies, but there’s been a resurgence in traditional City occupiers from the professional sector.

October 27, 2015

Seven ways your choice of new office may boost business performance ⁰

by Darren Bilsborough • Comment, Facilities management, Property

There are generally four main reasons why a business considers changing to new office space: your business is growing and your existing office can’t be expanded to accommodate that growth; your need for office space is reducing due to a change in business circumstances; your office lease is nearing expiration: you are prepared to explore whether a change in office could improve your current business performance. It is the last of these four reasons that sits at the heart of this article, but that does not detract from the validity of the other motivations for investigating options for new office space. Changing office space requirements and/or the fact your lease is expiring do not preclude searching for new ways to improve business performance. In fact, they provide a compelling excuse to explore alternatives and often organisations choose to move for a number of good reasons.

October 26, 2015

An updated green building standard designed to meet wider business objectives ⁰

by Sue Gregson • Comment, Facilities management, Legal news, Property

The publication in September 2015 of the revised ISO 14001 Global Environmental Management Standard has been heralded as a move that will “shift business focus on the environment from compliance with regulations and direct operations, to placing the environment at the heart of thinking and strategy.” This will assist businesses around the world to respond to increasing global sustainability challenges and ensure long-term business success. Currently there are over 300,000 organisations worldwide that are certified to the ISO 14001 Standard, first published in 1996. According to the Institute of Environmental Management and Assessment, (IEMA) ISO 14001 is the second most used standard companies employ to manage their performance globally, with 171 countries now represented. Its popularity as a management tool has been linked to both improved financial and environmental performance.

October 25, 2015

Vacant property management survey seeks FMs main concerns ⁰

by Sara Bean • Facilities management, News, Property

When squatting in a residential building became a criminal offence three years ago an Orbis survey revealed that a third of property managers predicted a rise in squatters targeting commercial properties as a result. Orbis has now launched a new vacant property management survey for 2015 with the BIFM to obtain views from property and facilities managers about the empty buildings in their portfolio. It seeks to understand what facilities managers’ main concerns are when it comes to empty buildings, their understanding of the legal and insurance requirements around empty properties and how they currently manage them. The survey also considers urban exploring, the exploration of man-made structures, to determine whether this is a growing trend and a threat. Guy Other, chief executive officer of Orbis said: “With this new survey we will better determine the extent of the problem in 2015, and the extent of any new threats.” Click here to take part

October 23, 2015

Multi office occupiers in the City of London could face millions more in taxes ⁰

by Sara Bean • Facilities management, Legal news, News, Property

Multi office occupiers in the City of London could face an additional tax bill of an estimated £720million thanks to the recent Woolway v Mazars Supreme Court decision, which could allow the Valuation Office Agency (VOA) to assess business rates on a floor by floor rather than the entire area a company occupies, Cluttons has warned. Currently the VOA applies an allowance, or discount in layman’s terms, on substantial accommodation occupied over several floors in a building, subject to the size and specification of areas occupied. Within the Square Mile allowances starts from 70,000 sq ft for Grade A office space, 50,000 sq ft for Grade B and 21,000 sq ft for basic or poor accommodation. However, the Supreme Court’s decision, which contradicts previous case law and the VOA’s current policy, could mean businesses may lose any size allowance on their existing rating assessments.

October 22, 2015

Shrinking Asian workplace density could impair business performance ⁰

by Sara Bean • Facilities management, News, Property, Workplace design

Workplace static density, i.e. the space per sq. ft. per workstation, has halved in many Asian markets over the last decade and in many parts of Asia, this has already reached a point where further reductions will impact productivity, performance and retention. In Hong Kong, India and China, workplace space has shrunk from 100 sq. ft. per desk to 50-60 sq. ft. per desk. This figure is nearly half that of Europe and the US, where density norms are around 150-200 sq. ft. per desk. Elsewhere, in Australia and New Zealand, standards remain more generous at around 90-150 sq. ft. per desk. CBRE’s recent report, Space Utilization: The Next Frontier, looks at how organizations across the region are now under pressure to drive down costs by increasing their workplace ‘static density’ and suggests ways in which companies can use workplace density and utilization data to drive efficiency and business performance.

October 21, 2015

Small businesses vital for cities, but London SMEs struggle with property costs ⁰

by Mark Eltringham • Cities, News, Property

Two new surveys demonstrate that while small firms in creative sectors are essential for the economic success of the UK’s cities, many small businesses are struggling to find appropriate and well-priced office space in London and are now calling on the incoming new Mayor of London to address the issue as a matter of urgency. While a report from the Centre for Cities shows how small businesses in the creative, professional and digital sectors drive job growth, productivity and average wages in ten key UK cities, the study by the Federation of Small Businesses claims that the cost of commercial property remains one of the most pressing concerns for many SMEs based in London. The FSB study also found that the cost of living in London was also a concern for small employers in the capital, with many claiming it makes it incredibly hard to attract and retain employees.

October 15, 2015

M25 office sector has fastest rate of rental growth in fifteen years ⁰

by Sara Bean • Facilities management, News, Property

The Outer London/M25 Office sector, known as the ‘doughnut’ has recorded the highest rental growth since 2000 according to the latest CBRE Monthly index. Rental values for offices in the ‘doughnut’ grew by 1.0 percent in the last month, the fastest monthly rate since July 2000 (1.4 percent) and growth of 4.2 percent since January. Central London offices also recorded rental value growth of 1.0 percent however, which is the fourth time growth in the capital has reached this mark in this calendar year. Central London rental values have risen by 7.1 percent in 2015 with offices in the West End and City having the biggest impact. The rest of UK slowed marginally from 0.5 percent in August to 0.4% in September, but due to London’s strength, UK wide office rents are now growing at a 7.4 percent, their fastest annual rate since March 2008, and a post recessionary high for the sector.

October 14, 2015

Workspace shortage as office to residential rights made permanent ⁰

by Sara Bean • Architecture, News, Property

The British Council for Offices (BCO) has warned that the UK needs to avoid a free-for-all following the government’s announcement it is to make permanent the relaxation of planning rules on the conversion of office to residential properties. According to recent BCO research, changes to the Permitted Development Right for office to residential conversion led to over 6 million sq ft of office space in England being converted to residential use in 2014. Some of the most concentrated commercial property markets have been significantly affected by this. In London, office to residential conversions are now occurring at a faster pace than ever before with 2.7 million sq feet of office space lost to residential conversions since May 2013. London Assembly Member Nicky Gavron questioned the decision to extend the scheme saying that it will reduce the availability of affordable workspace required by start-ups and small businesses in the capital.

October 13, 2015

Small business demand for coworking space ‘set to soar’ in the UK ⁰

by Neil Franklin • Facilities management, News, Property

New research from the UK solicitors network QualitySolicitors claims that demand for flexible coworking space is set to soar, with 71 percent of SMEs predicting this to be a priority for them in the short and medium term. According to the study of 250 small business decision makers, over two fifths (42 percent) believe that having a flexible and adaptable space where they can grow is ‘more important’, almost a fifth (18 percent) say it’s important to be able to interact and collaborate on ideas with other businesses in their premises and a further 39 percent are looking for a workspace with networking opportunities. It’s not just the space that needs to be flexible however; over half (54 percent) claim they want flexible, short term lets when negotiating their lease and 53 percent would demand a break clause to prevent them from being tied down if the space is no longer practical for their business.

October 13, 2015

Gateway cities spearheading a global commercial property revival ⁰

by Mark Eltringham • Cities, News, Property

Investment in commercial property is at its highest level worldwide since the 2008 downturn, according to a new report from Cushman & Wakefield. The firm’s annual Winning in Growth Cities report claims that global investment levels increased by 16 percent in the year to June 2015 to stand at US$942.8 billion. The report suggests that global volumes will rise 17 percent over the next twelve months to hit a new record high of $1.1 trillion. Growth will be led again by markets in North America and Europe with patchy levels of investment worldwide. This has already led to the world’s top 25 ‘gateway cities’ in terms of investment increase their market share from 51 percent to 53 percent with cities like New York remaining attractive locations for foreign investors.London was the second largest market overall but top for foreign investors, while Tokyo, Los Angeles and San Francisco made up the rest of the top five.