December 6, 2017
Commercial property sector disconnected from game changing new tech, claims report
Executives in the commercial property sector have significant reservations about emerging disruptive technologies such as Big Data and predictive analytics, augmented and virtual reality, Blockchain and driverless vehicles, but see huge potential for process automation according to the Altus Group CRE Innovation Report (registration required). According to the report, which is based on a global survey carried out in September of 400 CRE executives at firms with assets under management of at least US $250 million representing a total of over US $2 trillion, a large majority of executives report their firms have benefited from technology investments made over the past two years. However, when presented with six rapidly emerging disruptive technologies, only a minority of respondents recognised them as having the potential for major disruptive impact.
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One in three commercial real estate investors say Germany is their preferred region to invest in, the first time that Germany has been chosen as the number one region for investment ahead of the UK in the annual BrickVest commercial property investment barometer (‘the Barometer’) Germany was selected by 33 percent compared to the 27 percent who choose the UK, which saw a drop from 33 percent to 31 percent in the last quarter and from 32 percent in the same Barometer 12 months ago. Nearly one in five (17 percent) selected the US, which represents a slight increase from 12 months ago (16 percent), while France was selected by 15 percent, the same as Q3 last year.
Following a period of stability over the last few quarters, despite the Brexit vote, London’s office market is increasingly coming under pressure, according to Clutton’s London Office Bulletin for Summer 2017. According to Ralph Pearson, Clutton’s head of commercial agency – this is due to reduced levels of occupier activity post Brexit where there is increased instances of tenants renewing leases rather than electing to relocate. Although take up in the second quarter of this year was close to the five-year average, the main reason for this was due to activity carried out by WeWork, which accounted for the two largest deals – involving a total of 425,000 sq ft in Shaftesbury Avenue and at South Bank Place. The market has since begun to stagnate, and so far, for the third quarter of this year quoted rents have slipped across much of central London with rent free periods continuing to lengthen.
Companies in the tech and media (TMT) sector have accounted for the greatest proportion of City take up so far this year new figures from Savills suggest. This is the largest amount of take up ever by this sector in the first five months of a year, representing a 20 percent share of the market, ahead of the professional services sector at 17 percent and insurance and financial services sector at 14 percent. TMF firms took 517,069 (48,036 sq m) of space out of a total of 2.25 million sq ft (208,699 sq m) to the end of May 2017. Key deals to complete in the City recently include visual effects company Industrial Light & Magic (owned by the Walt Disney Corporation) taking 47,010 sq ft (4,367 sq m) at Lacon House in the City fringe (Theobalds Road, WC1), joining other tech companies Argus and Exterion Media in the building.
December 21, 2017
Commercial property is undergoing tech disruption, but not as some believe
by Polly Plunket-Checkemian • Comment, Facilities management, Property, Technology