Contents:
London's office construction volumes 'treble'
Over the last four years, the London office market has seen construction volumes treble, new research suggests.
According to data from Drivers Jonas Deloitte, the last six months alone have seen a 28% increase in office space under construction. This total has risen to 9.2 million square feet.
The report added that for the first time in a year and a half, office construction projects are now beginning to be seen in the Kings Cross and Docklands areas, rather than just the West End.
Despite these findings, the firm’s report said that developers’ confidence could be negatively impacted by the ongoing crisis in the eurozone region.
Anthony Duggan, head of research at the organisation, said: "Developers feel that the low levels of construction, compared to historic trend, and lower building costs are compelling."
The end of work on the Pinnacle skyscraper was something of an anomaly compared to an active market overall, he indicated.
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Mayor calls for office plan rethink
The Leicester mayor says the time spent on trying to develop the prime office space near the railway station is hampering development elsewhere in the city.
Sir Peter Soulsby believes the £150 million office development plans, part of Leicester’s regeneration project going back 10 years, are no longer good idea.
The office project has not yet managed to get started properly, and Sir Peter now feels focusing on other parts of the city for prime office space would be a better idea.
To this end he is urging local firms to assist the city council over the coming five months in creating a list of good areas for office development in the city, which is set to be named the Leicester City Office Development Opportunities Study.
Sir Peter said: "It’s not always helpful for councils to be defining the areas where investment should be encouraged.
"It’s important that we identify areas with development potential. But it’s right that we roll out other areas where investors could bring value and investment.
"I’m determined that this is something that will lead to action rather than gather dust on the shelf.
"The study is beginning now and the intention is for this to be a short piece of work with a report back to us in the autumn."
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'Surge' in Leeds office take-up
Leeds city centre has enjoyed a 300% year-on-year rise in the adoption of office space, figures show.
According to research from the Leeds Agents’ Forum, in the opening three months of 2012, 155,847 sq ft of office interior space was occupied.
This compares favourably with the corresponding period of 2011, when the total office space take-up stood at just 37,000 sq ft.
The average size of a deal in the city went up at the start of 2012, with eight deals involving office space of more than 5,000 sq ft in scale.
Commenting on the new figures, Richard Thornton, office agency director for the Jones Lang LaSalle Leeds office, said: "Following on from the positive end to 2011, which saw a 30.5% year-on-year increase, we have seen a dramatic uptake in city centre take-up in the first three months of 2012."
He added that large-size deals dominated the market between January and March of this year.
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Bury Council considers office sell-off
Rather than cutting jobs and services, Bury Council might be prepared to save cash by selling off some of its office space, reports suggest.
Those on the look-out for office interiors in the North West might be able to purchase space in landmark buildings like Athenaeum House, Castle Buildings and the Connexions office in Broad Street.
It is thought that as much as a quarter of the council’s buildings could be sold as part of plans to save £300,000 on accommodation expenses.
However, John Smith, the council’s deputy leader and executive member for finance, said the organisation’s final decision will take issues like the condition of buildings into consideration.
He stated: "We are currently experiencing unprecedented reductions in revenue budgets which have underlined the need to make the best use of the resources available to the council.
"The asset management plan makes the case that the council can no longer manage its property in the same way that it has done in the past."
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Plans unveiled for Waterloo office space
Plans for a major new office construction project have been unveiled which could see a site developed near Waterloo Station in London.
The proposals, which would see 920,000 sq ft of office space created, are set to be reviewed by the London Borough of Lambeth.
It is also hoped that an all-encompassing international business hub could be created in the area by Sir David Chipperfield, the award-winning architect.
Among the ideas put forward, it is thought a 107,000 sq ft glass-fronted gallery could be created near Waterloo International, called Victory Arch Square.
And two business-focussed centres could be developed in place of the existing Elizabeth House site on York Road. Under the plans, the North centre would contain 29 storeys, while the South site would offer 10 storeys of office space.
Retail outlets would also be incorporated into the bottom floor of the South building.
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Renovation for historic Cornish site
Renovation work being carried out at a Cornish building more than 700 years old could lead to seven jobs being created.
The work at the Old Duchy Palace in Lostwithiel has received approval for ERDF (European Regional Development Fund) Convergence investment.
This will allow the creation of 130 square metres of office space and the restoration and improvement of the structure, with the estimated seven jobs being created once work is finished and tenants are preparing to move in.
It is likely new tenants will be already weighing up options for office interior design to ensure their new base has the right look.
The plans for the grade one-listed palace, managed by the Prince’s Regeneration Trust and its subsidiary the United Kingdom Historic Building Preservation Trust, are costed at £600,000.
The offices at the site, which sits on the corner of Fore Street and Quay Street, will be ideal for anything connected with history, said Lostwithiel business group vice-chairman Mike Dobbie.
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Liverpool approves dockland project
A large-scale docklands project that will take 30 years to complete has been given planning permission by Liverpool Council.
Liverpool Waters aims to transform 60 hectares of historic dockland into a mixed use waterfront quarter that will include hundreds of thousands of square feet of Grade A office space.
The project will focus on sustainable development and is to take the site’s cultural heritage into account. Once finished, it is expected to contribute significantly to Liverpool’s growth and development.
The project is also aimed at strengthening connections between Northshore and the city centre and will attract businesses from around the world. It is hoped that it will also increase visitor numbers.
Since Liverpool Waters, the largest project ever to be considered for planning approval in Liverpool, is of regional and national significance, the Government will have to give its final approval to the project or call for a public inquiry before it can go ahead.
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Office space may create 'Airport City'
A huge scale office refurbishment near the North West’s foremost airport will help to create a new ’city’ if proposals are given the go ahead.
A master plan for Airport City Manchester has been unveiled detailing how 5 million sq ft of office space on the 150 acre site near the airport can be turned into a new central business district.
The development could take up to 15 years to realise and was recently launched by Manchester Airports Group at real estate show, MIPIM.
The group’s chief executive Charlie Cornish said: "Airport City is a once in a lifetime opportunity... creating an international business destination linked to the global connectivity of the North’s major international airport and driven by the region’s global offer in terms of academic, scientific and technological credentials, supported by its communications and transport infrastructure."
The aim is to develop the office space for manufacturing, retail, leisure, warehousing and logistics use to create the new business park, which will also be close to the new Metrolink line.
Manchester Airports Group said - along with the varied office space - bars, eateries and coffee shops will create ’a conventional city centre’ with ’world-class facilities’ by the airport.
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Plans for Manchester office cluster
Developers want to create a new business cluster in the heart of Manchester for small firms and start-ups in the creative industries.
Ken Knott and Ian Simpson want to build the new offices near the £80 million First Street development to cater to smaller cultural and creative business.
A cornerstone of the proposed project is to regenerate the Oxford Road train station entrance, which is being discussed with Manchester City Council and Network Rail.
Developers want to remove eight rail arches on Whitworth Street West and put offices for small businesses in the remaining arches.
A thoroughfare would be made linking the station to the start of First Street by utilising space surrounding the Hotspur Press in Cambridge Street.
The proposed redevelopment aims to complement the work already being undertaken on First Street and the creation of Manchester’s ’knowledge corridor’.
The plans were unveiled during a talk on the £80 million development on First Street at the MIPIM property convention held in Cannes.
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Welsh slate clads 45m development
Birmingham city centre’s £45 million Snowhill project, which is now being clad with 18,000 sq ft of Welsh slate, is well on the way to being completed by late 2012.
The 14-storey development will incorporate 305,000 sq ft of office space and 9,000 sq ft of retail accommodation. Installing the dark blue grey riven stone slate will take several months.
Industry experts reckon the material is the "Rolls Royce" of slate as it is the toughest natural slate known, with the longest life cycle of slates. It comes from Welsh//Slate’s Cwt-y-Bugail quarry in North Wales.
Welsh slate is used mainly for Grade I and II listed buildings and high end commercial and self build projects around the world.
The material is non-porous so it is very resistant to weathering and damage from chemicals, said Welsh//Slate’s architectural sales manager Andy Carson. It is protected from frost damage by low water absorption levels, he added.
"We look forward to seeing our product forming an important piece of Birmingham’s skyline for many years to come," said Mr Carson.
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Rise in demand for office space
The number of office refurbishments will be increasing in the City of London after a growing number of companies chose to set up business in the capital at the end of 2011.
The City has seen 4m sq ft of office space taken up over the past year, compared to 3.5m sq ft in 2010, according to a study by property consultants EA Shaw.
Some of the most popular areas to buy property for businesses were Soho, Covent Garden, Bloomsbury, Holborn and the South Bank.
Covent Garden had the biggest increase in popularity with around 55% more business purchasing property, which equalled 1.241m sq ft.
Technology companies bought up the most space in the City when compared to 2010 as the sector experienced a booming market and expanded to 1.3m sq ft in the last year.
The increased demand for central London locations was at the highest rate since the start of the economic downturn.
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City office space demand surges in Scotland
Scotland’s two biggest cities saw demand for office space rapidly increase in 2011, by 19% in Edinburgh and by 14% in Glasgow, a survey has revealed.
Workstation prices rose on average in both areas as larger companies moved in, taking space and forcing price increases.
The survey by search service officebroker.com also found businesses were demanding larger space and suggested that firms had raised average requirements in offices by just under two workstations on 2010.
The service reported a 28% rise per workstation in Edinburgh to £315, making the Scottish capital the most expensive spot in a city centre for serviced office space outside central London. And in Glasgow, a 21% price rise in office space year-on-year came to a £206 average per workstation.
Activity in these areas in the two major cities reflects the changing needs of companies during uncertain times, said Chris Meredith, UK head of sales at officebroker.com.
Flexibility is a chief concern for all sizes of company given the increasing amount of larger companies in the market, said Mr Meredith.
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City lacks grade A offices: report
Southampton’s financial and professional services companies are missing out on inward investment because of a "distinct shortage" of top-level office space, a property company has reported.
Premises with a grade A office fit-out are sorely lacking in the Hampshire city, the report by Jones Lang LaSalle shows.
Michael Green, who runs the company’s Southampton base, said vacancy rates for offices in the city are high but premium space is in short supply, pointing out that "the pipeline of new schemes has dried up".
He went on: "This will have consequences, not least on the city’s ability to attract or retain footloose inward investors from the financial services and professional sectors."
Mr Green said a "serious supply shortage" of grade A office space will become more apparent in 2013-14 "before new schemes are capable of attracting funding and are then built out".
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Office targets creative industries
Permission is being sought for a new three-storey office development made from shipping containers at the Seabraes site in Dundee.
The scheme, for Scottish Enterprise, is aiming to being in more creative industries to the former railway goods yard site.
The plan is hoped to be a pilot scheme for similar office redevelopment, and if successful, nine other such blocks could follow. The design seeks to provide "low-cost, energy-efficient and flexible work pod spaces for young, start-up companies in the creative industries".
Its added: "Most digital media/creative users will use office-type buildings. It is suggested that the 2004 masterplan concept of relatively large, single floor-user buildings is no longer appropriate. The completed market analysis has largely determined future building requirements for small, flexible work units."
Working in conjunction with Abertay University, which has strong links to Dundee’s digital media and video game sectors, planners found that most business start-ups would require space of only up to 1,000 square feet.
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JLL issues business lease event warning
Property agents Jones Lang LaSalle has warned that more than 14 million sq ft of office space in Britain is approaching either expiry or a break clause in the lease.
It is thought that this could pose a significant threat to commercial property market recovery if firms see this as an opportunity to downsize.
JLL revealed that over the next five years there will be 6.2m sq ft of expiries and breaks in London, while there will be another 8m sq ft in other big cities.
Although the company has warned the importance of these lease events "cannot be overstated" there is a "greater propensity to extend and restructure" leases among firms.
But, with the City workforce expected to remain flat, developers of new office buildings in London have been targeting companies with lease events as potential tenants.
Some of the businesses expected to look for London-based office space this year include LinkedIn, Saatchi & Saatchi and Prudential Regulatory Authority.
The office space required for those expansions is expected to be just 775,000 sq ft, which JLL has warned would see the take-up of office space fall below the 10-year average.
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70% of UK offices 'of poor quality'
Research indicates that nearly 70%, or 721 million sq ft, of all office space in the UK is categorised as being of poor quality, and therefore might benefit from undergoing some sort of office refurbishment.
Real estate adviser DTZ’s report categorised prime office space as grade A , with good-quality secondary office space rated as grade B and poor-quality secondary office space given a grade C rating.
Some 85% of office space in the minor UK markets is of a grade C quality, whereas only 54% of office space in central London was rated in this category. This is because land in central London attracts a higher price than anywhere else in the country and therefore offices need to be of a higher quality to reflect the higher premium.
In most markets, grade C office space exceeds the total amount of grade A and B office space. In total, grade A office space accounts for 9% of the UK market, while 22% of the UK’s offices are of grade B quality. Excluding the main office markets, garde A and B offices account for just 4% and 11% respectively.
Hans Vrensen, DTZ’s global head of research, said: "This analysis is an initial step towards sizing the non-prime market. This is important given that non-prime property is collateral for much of the circa £300 billion real estate debt in the UK."
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Aberdeen 'leads Scottish office market'
The Aberdeen office space market outperformed Scotland’s other major cities in the third quarter of 2011, new research indicates.
Figures from CBRE reveal that more Aberdeen office interiors were taken up in the three-month period than in the previous two years.
However, take-up of office space in the city was lower than the first two quarters of 2011.
New office space now makes up 17% of the market, with most of the city’s 761,631 sq ft of space classed as second hand.
In comparison to the Aberdeen statistics, CBRE said that the take up of office interiors in Glasgow reached 91,670 sq ft in the third quarter, while in Edinburgh it peaked at 103,717 sq ft.
The Scottish capital saw a 52% drop in the uptake of office space between the second and third quarters of the year.
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Lack of quality space in Midlands
There is a lack of quality office space in the Midlands, a new report has revealed.
But the area is oversupplied with secondary and tertiary stock, according to research from national commercial property firm Lambert Smith Hampton. The report reveals that rental levels for office space are likely to remain static for the next 12 months, at least, in the West Midlands.
It said: "Availability levels have remained high in the Midlands, although prime office space continues to be limited and most availability is of lower grade stock."
The findings showed there is only 300,000 sq ft of prime space available in Birmingham as the region faces a shortage of grade A office space as demand is far outstripping current supply and the shortfall is being made up by secondary and tertiary stock. The report also discovered that the market is Nottingham is over-supplied with such space.
Although there are no strict rules on what makes office space prime, secondary or tertiary, prime office space is normally found in the heart of a city and the office design is of a very high standard with top-quality materials used.
It is predicted that the only growth in the office space rental market during 2012 will be in Central London and certain other parts of the South.
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Council hails West End office boom
Despite the tough economic climate, building contractors still see central London as a great place to invest in new office developments.
The Crane Survey’s half-yearly report found that the number of commercial building projects in the West End is on the up, and higher than at any point during the last two years.
London now has around 2.3 million sq ft office floorspace earmarked by developers, with some of it considered to be of the highest standard.
Westminster City Council said it is a great boon for central London that it is bucking the national trend and attracting investment.
Councillor Jonathan Glanz described it as great news for local businesses.
He said: "In tough times this shows the endeavour, hard work and entrepreneurship of workers and business in this area will help us to continue to buck the national trend.
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