Search Results for: commercial

August 5, 2016

UK commercial property market hits record high but Brexit uncertainty lingers ⁰

by Mark Eltringham • Cities, News, Property

The UK commercial property sector is now larger than at any time since before the last recession, claims a new analysis from the Investment Property Forum. It has risen nearly 50 percent since its lowest point in 2009 and is now valued at £871 billion, an increase of around 11 percent. The amount of stock actually shrank last year, according to the study, with the increase in overall value arising from price rises. The previous highest valuation the IPF puts on the market was £865 billion in 2006. All is not good news however as a second report from the same organisation which explores sentiment in the market following the Brexit vote confirms there is a great deal of uncertainty in the market. This is particularly acute in the London market which makes up over a third of the nation’s total and is increasingly dominated by foreign owners who may have a negative response to the UK’s vote to leave the EU. Intriguingly, the report found that total floorspace marginally declined over 2015 and has only increased by 0.9 percent since the market high of 2006.

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.

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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.

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June 3, 2016

Commercial real estate failing to meet sustainability standards ⁰

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

There is an urgent need for more action and greater leadership in tackling sustainability requirements in commercial real estate. Just a handful of large companies are meeting sustainability challenges, according to Bilfinger GVA’s sixth Green to Gold survey on the risks of rising sustainability pressures and market demands, with the progress being made not as strong as expected. Although 84 percent of respondents acknowledged that they have a sustainability strategy in place, there are still huge gaps that need to be filled in order to meet appropriate standards. Only 50 percent admitted to assessing operational energy efficiency, whilst 63 percent are not assigning specific figures for the costs or benefits of sustainability issues in investment appraisal calculations. Added to this, 43 percent are yet to assess their portfolio’s risk profile with regards to Minimum Energy Efficiency Standards. This means the industry now finds itself with more to achieve in significantly less time.

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April 15, 2016

Office demand prompts rise in level of London commercial construction ⁰

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

London has reached the highest level of commercial construction since 2008, with activity totalling £7.4 billion. According to JLL and Glenigan’s latest UK Commercial Construction Index the level of speculative office development under construction in Central London totalled 8.3 million sq ft at the end of Q1 2016, well ahead of the long term average (5 million sq ft) indicating that developers are continuing to respond to London’s burgeoning requirements for new office floor space. In the West End office market alone, construction started speculatively on nine schemes in the first quarter of this year totalling 596,997 sq ft; the highest level of commencements since the end of 2014. The largest starts were at Brunel, W2 at 241,000 sq ft, which is scheduled to complete in 2019 and The Foundry, W8, a refurbishment planned to complete by the end of this year totalling 110,000 sq ft.

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March 18, 2016

Increase in commercial office take up across Europe expected to continue ⁰

by Sara Bean • Facilities management, News, Property

The commercial property occupier markets across Europe recorded healthy improvements in activity during 2015, with the total take-up in the major office markets rising by 10 percent, according to Knight Frank’s latest European Quarterly Report. Although there was a drop in take-up in Europe’s two largest markets, London and Paris, this was made up by the strong performance of German, Iberian and Central and Eastern Europe markets. Commercial property rents rose by around 3.5 percent over the course of 2015, largely due to growth in markets such as Dublin, London, Madrid and Stockholm. Rental growth is expected to spread to a wider range of cities in 2016 with Paris, for example, expected to see prime office rents rise following more than two years of stability. A total of €64.5 billion was invested in European commercial property in Q4 2015, taking volumes for the full year to €238.5 billion. This represents a 25 percent increase on 2014.

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February 22, 2016

Commercial property costs organisations more than commonly supposed ⁰

by Sara Bean • Facilities management, News, Property

The British Council for Office (BCO) has released a new report which questions the commercial property industry’s commonly ‘accepted wisdom’ that if you break down overall business operation costs, 80 percent of the total goes on salaries and 10 percent on property, with other expenses making up the rest. The BCO’s analysis has found that a more realistic split is 55 percent (salaries), 15 percent (property) and 30 percent (other business costs). So while salaries continue to dominate overall costs, property and non-property business costs play a greater role than the commonly received idea. The BCO believes this clearer understanding of how much property represents of overall business costs will now change, influence and underpin business decisions. This new analysis may also have an impact on rental forecast and could also affect the impact of changing business rates – affecting what organisations may be able to afford.

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February 19, 2016

A fifth of UK commercial property may fail to meet new energy standards ⁰

by Mark Eltringham • Environment, Facilities management, News, Property

Earlier this week, we reported on the surprisingly large proportion of the UK’s commercial property that emitted far more carbon than it was designed to produce. Now, a new report from Cushman & Wakefield suggests that nearly a fifth of commercial buildings in England and Wales could be barred from being let because it does not comply with new Government energy standards. The report urges owners and investors to understand their risk and where necessary make improvements to ensure their buildings exceed the minimum energy efficiency standard – or face the prospect of the value of their assets decreasing significantly. The Government’s Energy Act, passed in the last Parliament, included a provision that from April 2018 it will be unlawful to rent out a business property with an EPC rating below the Minimum Energy Efficiency Standards (MEES), which is an ‘E’ rating. Any building that fails to meet this requirement (rated ‘F’ or ‘G’) will be classed as “sub standard” and may suffer a substantial drop in value.

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February 15, 2016

UK commercial buildings emit far more carbon than they were designed to ⁰

by Mark Eltringham • Architecture, Environment, Facilities management, News

Commercial buildings in the UK may be producing an average of 3.8 times more carbon than the estimate presented at their design stage, according to research from InnovateUK. The study examined six years of data from Innovate UK’s Building Performance Evaluation (BPE) Programme. It found that only one of the 48 buildings studied produced the amount of carbon specified by its design. In some cases, total emissions were 10 times the rate calculated for Part L compliance. ‘Building Performance Evaluation Programme: Findings From Non-Domestic Projects’, identifies complex energy controls and building management systems (BMS) as significant factors in poor levels of carbon emissions, suggesting that they should be simplified. Although two-thirds of the buildings studied employed renewable energy, a significant proportion of these experienced problems that had a negative impact on their energy consumption and carbon emissions.

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February 10, 2016

Moderate growth for global commercial real estate predicted in 2016 ⁰

by Sara Bean • Facilities management, News, Property

US and European office markets will tighten further in 2016 as demand for space outpaces a limited number of new developments, according to CBRE Group’s 2016 Global Real Estate Market Outlook. However, the extent of tightening in individual cities will depend strongly on local job growth in major office-using industries. Global prime rents across the three major property types—office, industrial and retail—are expected to grow 2.2 percent on an annual basis, according to estimates from CBRE’s Global Rent Index. The Americas, thanks to the strength of the US property sector, is expected to see commercial real estate rents rise 3.4 percent in 2016, as consumption growth and rising employment, combined with comparatively limited new supply levels, simulates demand. Rents in EMEA are forecast to rise by 3.2 percent thanks to a combination of increased consumer spending, pent-up demand for commercial space and anticipated further monetary easing by the European Central Bank.

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February 5, 2016

What the commercial property market tells us about trends in office design ⁰

by Paul Goodchild • Comment, Property, Workplace design

It’s become commonplace in recent years for certain people to foresee the death of the office. The problem with this argument is that, in spite of its drawbacks, office life maintains an attraction for both employers and employees and there will always be an upper limit on how long people want to spend away from other people. Things are changing but the death of the office is a myth. As we’ve known for at least a quarter of a century, there is no absolute need for us to go to work at all. Theoretically we could just do away with offices completely if we wanted to. But as we have seen, the fact we have evolved technology to the point where we could forget about bricks and mortar, doesn’t necessarily mean we will. Not only are there practical reasons for offices to continue to exist, there are emotive ones too. If you want evidence of this, look no further than the records currently being set by the UK’s commercial property markets.

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February 2, 2016

Record investment in UK commercial property in 2015, but trouble ahead ⁰

by Mark Eltringham • News, Property

A near record £67.5 billion was invested in UK commercial property in 2015, making it the second strongest year on record and 46 per cent above the 10-year average, according to research from commercial property analysts CoStar Group. Momentum slowed sharply in the second half of the year, with investment down 19 per cent from the previous year. According to CoStar, this reflects the fact that investment activity has been especially strong over the previous 18 months and good opportunities are harder to find, but also that global economic and political uncertainty are impacting investment decisions. Nevertheless, 2015 was a strong year for the UK’s Big Six regional cities. Office investment increased 16 per cent to £3.2 billion, which is the highest level since the recession and more than double the eight-year average. Foreign investors seeking standing assets and development opportunities underpinned much of this investment.