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Major scheme starts on site

London Offices – An Olympic Year?

Consent for refurbishment

HQ refurbishment application

London Office Market – Special Report

Architect change in EC3

Plans progress

Refurbishment in WC2

Delay for City scheme

Refurbishment possible

City tower consent

Kings Cross office appointment

Summer finish for Lothbury

London Bridge architect

Demolition completed

Consent for huge Docklands scheme

Station scheme for SE1

Castlemore start on site

Valad to complete in autumn

Bank scheme start

Completion for major W1 scheme

RBS major pre let

Contractor for City scheme

City scheme to start

Lothbury consent

Completion for EC4 redevelopment

Major refurbishment in SW1

Consent for RBS scheme

New Drapers Garden plan

2nd place to HM Government

Canary vacancy rate rises

Major Hearn Street proposal

First letting at Medius

Bank of England to sell development site

Surge in London Office Development

London Office Prospects 2011: 75m sq ft of lease expiry hopes drives market forward

A surge in London office development is coming, with major office buildings planned to come on-stream in 2012-2015 to meet an anticipated increase in demand.

This demand is expected to come from those occupiers, which took space in the mid 1980’s boom and early 1990’s, with leases coming to an end on what is now outdated space.

Our research on occupier ‘moves’ in central London indicates a potential of up to 17m sq ft of lease renewals due in 2011, and an average of about 15m sq ft a year of lease expiries a year up to 2015.

The question is “How much of this lease expiry-led ‘demand’ will result in new space being taken-up?”

The London office market is fairly consistent on office space take-up with the average being about 10m sq ft a year over the last decade. In these terms 2010 was above average with over 11m sq ft of office space taken-up, the majority in large pre-lets.

If half of lease expiries (say 7.5m sq ft) each year actually turned into office ‘moves’, this would then mean a further 2.5m+ sq ft of office demand would have to come from existing occupier expansion and new ‘start-ups’ to achieve even the average for annual take-up.

This would then mean occupiers would be renewing leases on around 7.5m sq ft of office space each year with the potential for refurbishment deals. In addition the 7.5m sq ft (or possibly more) of office space vacated by ‘movers’ could be returned to building owners and would need to be upgraded for letting.

To meet the expected lease expiry-led office demand a substantial supply of new Grade A development is needed in 2011, which is not going to arrive. Those occupiers with imminent lease expiries will be unable to find prime new office space and will therefore postpone moves, increasingly turn to pre-lets, or remain ‘in-situ’ and refurbish.

In 2011 development starts will be numerous (30+ is possible) but take-up is expected to be down on 2010 levels and the majority deals are likely to be smaller, perhaps under 4,645 sq m (50,000 sq ft).

The ‘volume’ of deals done in late 2010, combined with about 46,450 sq m (500,000 sq ft) of office space now under offer, will carry the fit-out market through to summer 2011. The office market will then become one of refurbishment and restacking until a new wave of occupiers starts to take up the developments coming on-stream from late 2012 onwards.

- (01-02-2011)

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Christmas 2010: 22% More Christmas Cheer - Official!

London office deals in 2010 are now 22% up - in terms of space taken - on last Christmas. CityOffices research has identified just over 11.1m sq ft of office deals in central London this year. This is the first rise in deals-done since take-up peaked in 2007. Recent pre-lets to Bloomberg, BNP Paribas and JP Morgan, have helped drive a strong final quarter of this year.

The take-up of Grade A recently constructed or refurbished space also shows a slight increase by 10%. Deals signed on prime space in central London account for 4.2m sq ft in 2010, compared to 3.8m sq ft in 2009.

The City of London has dominated deals this year accounting for 5.1m sq ft, or 46%, of total take-up. The West End saw just 1.8m, or 16%, of deals signed, with the remainder of lettings mainly focused on Docklands and ‘fringe’ locations.

Financial services came back strongly in 2010 and accounted for over 44% of space let. The next best performing sectors are professional services, media, and insurance, which together took 25% of space let.

The late surge in deals this year, and the large amount of space expected to be signed up in early 2011, means that the London fit-out market will be strong in the first half of next year. After that a reduction in available prime office space, and increasing rents, may lead to occupiers pre-letting, or undertaking short-term refurbishment and re-stacking, to await the next ‘wave’ of office buildings due to arrive in 2013.

So it looks like a Merry Christmas for all

Our best wishes for a prosperous 2011

The CityOffices team. - (24-12-2010)

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London survey looks forward

The latest Drivers Jonas Crane Survey, researched by Cityoffices.net, has found that despite 10.3m sq ft under construction (of which 7.15m sq ft is available to let) there were only six significant starts in Q4 2008 and Q1 2009. There are 30 buildings available to let at the moment of greater than 100,000 sq ft. DJ said developers should expect more prelets in 2010-11 for completion in 2013. Tenant’s choices will be reduced over the next few years. In addition short-term lease extensions being agreed now could generate further demand. - (11-06-2009)

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Consent for Drapers Gardens

The Royal Bank of Scotland has at last received planning consent for the redevelopment of its Drapers Gardens site bounded by Copthall Avenue and Throgmorton Avenue, London, EC2. The existing building is 32,996 sq m (355,168 sq ft) and the current proposals, submitted in April 2004, are for a stepped building of between five and 16-storeys, providing 37,452 sq m (403,733 sq ft) gross floorspace. The office element of the scheme will be on 13 floors and amount to 30,761 sq m (331,111 sq ft) gross external. There will be 131 sq m (1,410 sq ft) of retail space on the ground floor. The architect is Foggo Associates and Drivers Jonas is the development advisors. - (21-11-2005)

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Company Details for Drivers Jonas Deloitte