A new report from commercial property specialists Lambert Smith Hampton claims that demand for office space in the UK this year is set to hit its highest level since 2000. The firm claims in its annual Office Market Review that the take-up of office space could reach 30 million sq. ft in 2014, continuing the momentum from the remarkable 33 percent upswing in demand last year. However, the report also notes that, following the introduction of the Government’s new permitted development legislation in 2013, the number of notifications for conversions of office buildings to residential use jumped 500 percent in the first six months. The trend will act as a further constraint on supply and push up rents as businesses seek additional space for expansion or moves to new property at the end of leases although it will also remove obsolete office space in many less desirable business locations.

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Plans have been released for the £1.5 billion redevelopment of Silvertown Quays in the East of London. The 7 million sq. ft. mixed use scheme will cover 62 acres on the site of the Royal Docks directly opposite the Excel exhibition centre. The development will include around 2.5 million sq. ft. of commercial and retail space, and some 2,500 new homes along with education, research and exhibition facilities. As announced by London Mayor Boris Johnson in 2013, one of the key features of the  project will be an avenue of ‘brand pavilions’, where companies from across the world will be invited to showcase their products. The district will be served by a new bridge connecting it to the ExCel site giving access to transport links, including the new Crossrail station with express services to the City of London, West End and beyond.

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Manchester, Europe’s cheapest large city for businesses

The latest edition of KPMG’s bi-annual study of the comparative attractiveness of more than 100 cities (many of them in the US) as business locations claims that the UK is one of the world’s best countries in which to do business. The Competitive Alternatives Report  for 2014 assessed  the competitiveness of cities in ten countries across four commercial sectors – digital services, research and development (R&D), corporate services and manufacturing – and found that the UK is the second most competitive country for corporate services; third for digital services;  fourth for R&D and manufacturing and fourth overall. In Europe, the clear cost leader is Manchester with overall business costs more than 10 percent lower than those of London, the only other UK city assessed. The report claims the UK’s tax regime is a crucial factor for international enterprises as they make important funding and operational decisions.

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Edinburgh is one city enjoying a resurgence in investment

The distinctions between the commercial property market in London and those in the rest of the UK are becoming increasingly evident, based on new data from DTZ. While the value of transactions hit a record breaking £44.7 billion last year, up nearly a third on the figures for 2012, the majority of investments into regional markets were made by domestic firms while those in London were dominated by overseas investors. Around £23 billion of the overall total was invested in property outside of the capital, a reversal of last year when more money was invested in the capital than outside it. Meanwhile foreign investors spent a total of £20bn throughout the year with the majority (£14.2 bn) invested in Central London. According to DTZ, one notable trend in the year was for UK investors to divest property in London and shift investment to other areas of the UK.

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