Revamp considered for Lloyd’s of London building


The owner of the Lloyd’s of London building has brought in architects to come up with ideas of what to do with the London tower if the insurance market decides to leave.


Ping An, the Chinese insurer, has asked Rogers Stirk Harbour + Partners (RSHP) to draw up new designs for the building to make sure it remains commercially viable should it lose its longstanding occupier, according to React News, the property trade website.


The Lloyd’s lease does not run out until 2031, although it has a break clause in 2026 if it wants to leave early, which it has hinted at doing. The market said in January that it was “considering a range of options around our workplace strategy”.


A decision is expected before the end of the year.


“As we adapt to new structures and flexible ways of working, we are continuing to carefully think about the future requirements for the spaces and services our marketplace needs,” a spokeswoman said.


Lloyd’s, created in London more than 330 years ago, is made up of syndicates that write insurance policies. The syndicates are among the biggest underwriters in the world of high-risk coverage, including cyberthreats and aviation. The insurance market has been based at the 298ft-high tower, which is also known as the “inside out” building because its lifts and pipework are on the outside, since it opened in 1986.


The Lloyd’s building was designed by the late architect Lord Rogers of Riverside, who went on to form RSHP. It was bought by Commerzbank for £231 million in 2005 before Ping An paid £260 million for the building eight years later.


Ping An has asked RSHP to explore a redesign of the existing layout or see if the building could be turned into a hotel or events space, according to the report, which added that designs “remain in an early stage”.


While Lloyd’s is considering its options, there is no certainty that it will decide to leave its long-term base.


Ping An and RSHP did not respond to requests for comment.


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City law firm Slaughter and May pilots ‘bring your dog to work’ policy in wellbeing drive


Lawyers at Slaughter and May, the City law firm, will be able to bring their dogs to the office as part of a wellbeing drive if a new trial is successful.


The magic circle firm emailed staff this month to say it will trial a “bring your dog to work” policy amid a war for talent in the Square Mile.


The first pilot day will be on June 24 and, if successful, Slaughter and May will extend the scheme to take place on the last Friday of each month.


Slaughter and May’s employees were told that their dogs will not be allowed in the staff canteen, coffee breakout areas or meeting rooms during the trial.


They also must ask colleagues they share offices with whether they are happy to have pets present in order to accommodate those who are uncomfortable or unable to be around dogs.


Deborah Finkler, the new managing partner, said: “I have long been an advocate of having our dogs in the office and so am delighted that we are trialling Slaughter and May’s first ever ‘bring your dog to work’ day.


“The benefits of all animals and especially dogs to mental health, morale and alleviating stress are widely recognised, and I also hope that the trial makes for a fun and sociable day.”


The firm added: “We understand that not everyone is comfortable, or able to be around dogs and have put in place a series of guidelines around the day.”


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Flexible working is here to stay


Flexible working is not a trend and it’s not a phase – it’s here to stay. The companies that have accepted this and that have excelled at creating productive flexible work environments will reap the benefits in productivity, retention and collaboration.


Spotify, Airbnb, Atlassian and Lyft all have optional ‘work from home forever’ policies in place now. Spotify has even told employees it is happy to pay for them to work out of co-working spaces if the employees move to a new neighbourhood or miss being in the workplace and around people. People crave connection, even in the workplace, and this is so much harder to come by when working from home becomes permanent.


The importance of a separation between the home and the office, particularly for those who experienced protracted lockdowns, should not be underestimated.


This does not mean, however, that there are two clear options and ways forward – it does not boil down to a competition between going back to the office full time or working from home forever. If anything, the debate around the future of the office is old news.


Recent data from the Office for National Statistics (ONS) has illuminated how the British workforce is embracing hybrid working in the aftermath of the pandemic.


The ONS statistics revealed that the percentage of people working from home exclusively had fallen to 14% in May 2022.


In contrast to this, the proportion of those embracing hybrid working was growing, with more than eight in 10 people saying they planned to hybrid-work in 2022.


Flexible working by its nature offers spaces that promote collaboration, holistic wellness and interaction. These are all things people struggled to attain or maintain when working from home full time. At Huckletree, our central ethos is in creating ecosystems that benefit all members and are optimum spaces for personal and professional development – two things that are much harder to achieve if you are never working in the office.


In February 2022, only 8% of people said they intended to work in the office full time. Here, the numbers are reflecting the demand we are seeing for hybrid spaces and will prove that successfully catering to employees’ wants around flexibility will be a significant positive contributor to staff satisfaction, retention and wellbeing. In fact, the ONS data reported that more than three quarters of people (78%) who had embraced hybrid working in some capacity said their work-life balance had improved.


JLL has maintained that it expects to see flexible space represent 30% of the office market by 2030. We see this demand clearly reflected at Huckletree, where our spaces are at 93% occupancy. More than this, our configurations are evolving as more corporates, enterprise teams and scale-ups want flexible options that complement hybrid and innovative ways of working.


Creating an office space – with a good building, nice furniture and desks to work at – is no longer enough. People want to spend time in the office because they want to feel part of something bigger than the daily grind – the theatre of office socialising and collaboration, but above all, a community.


Gabriela Hersham is co-founder and chief executive of Huckletree

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Customer demand drives post-lockdown rebound for office giant Workspace


Workspace Group (Workspace) has revealed customer demand for its services has returned to pre-Covid levels, with its flexible office space becoming increasingly attractive in an era of hybrid working.


The company completed 1,520 lettings in the twelve months up to the end of March 2022, for a total rental value of £30m.


Like-for-like occupancy is now up 7.8 percentage points to 89.6 per cent, while like-for-like rent roll up has risen 8.7 percentage points to £92.9m.


The boost in demand has helped the company rebound from a year of deep losses.


Workspace has now recovered from being £235.9m in the red last year, to making a profit before tax of £124m this year.


Alongside customer demand, the turnaround also reflects rising interest rates and property valuations.


For the full-year, Workspace’s trading profits after interest were up 21 per cent to £46.9m, driven by a 6.4 per cent increase in net rental income to £86.7m.


Its total dividend was up 21 per cent to 21.5p per share, an increase from 17.75p last year


Meanwhile, the company’s overall portfolio valuation has risen to £2.4bn, an underlying uplift of three per cent (£69m) from last year.


The company has engaged in a flurry of acquisitions and sales for its portfolio to expand its footprint.


Workspace acquired The Old Dairy in Shoreditch for £43m last September, the Busworks in Islington for £45m in November, and post year-end it completed the acquisition of McKay Securities PLC for £258m last month.


Over the full-year period, it has also sold 13-17 Fitzroy Street in Fitzrovia for £92m, and Highway Business Park in Limehouse for £24m.


As for refurbishments, it completed the refurbishment of Pall Mall Deposit in Ladbroke Grove last September, and opened Mirror Works, a new business centre in Stratford, one month later.


The company has a healthy pipeline of redevelopment activity projected to deliver 1.2m square feet of new and upgraded space over the next five years.


Chief executive Graham Clemett said: “Our focus over the past year has been to support our customers’ return to the office, rebuild like-for-like occupancy back to 90 per cent and drive trading profit growth. I am delighted that we have been able to deliver on these targets, reflecting the fantastic efforts of the Workspace team, the quality of space and facilities we provide and the attractions of our distinctive flexible offer.”


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London office starts set to surge over next 6 months


London is set for a surge in office project starts over the next six months driven by pent up demand and improved building energy perfornce.


According to Deloitte’s latest London Office Crane survey report there is currently 2.7m sq ft of planned office buildings in demolition phase and scheduled to start before the end of September.


The projects will continue to follow the trend of a decline in new build and growth in sizeable refurbishments as pressure continues to re-use and recycle says the survey.


The most anticipated is the redevelopment of BT’s former headquarters, the 729,000 sq ft 81 Newgate Street near St Paul’s Cathedral.


A substantial retrofit will transform this imposing 1980s office block by spring 2025 with sustainability credentials a key influence on design.


Mike Cracknell, director in real estate at Deloitte, said: “Increased new starts – especially of refurbishments – reflects anticipated renewal of existing stock to provide sustainable and quality space now strongly demanded by occupiers.”


He added that the longer term outlook would remain strong as property owners and developers sought to upgrade building performance.


“A raft of delays, partly driven by supply chain disruption and labour shortages, contributed to a lag for developments to complete. Despite this, the market is displaying resilience with appetite amongst investors remaining strong. This coupled with occupier demand is contributing to confidence in the city.”


This sentiment is echoed by developers, with two-thirds saying they intend to increase their pipelines in the next six months.


At the same time, new Minimum Energy Efficiency legislation currently passing through parliament is anticipated to radically tighten standards, with minimum compliance levels moving from Grade E to Grade B by 2030.


The survey estimates that 80% of London office stock will need to be upgraded. This is equivalent to around 15 million sq ft per annum.


In the past six months 36 schemes started. Notably, 31 of these were comprehensive refurbishments.


This reflected cost-related challenges with new build and appreciation of the embodied carbon within existing structures increasing preference to refurbish, re-use and recycle are clear.


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Landsec reports record London office leasing as it returns to profit


Land Securities has reported record office leasing in London as the lifting of Covid restrictions fuels a return of workers and a surge in demand for prime space, as the property company bounced back to profit last year.


Landsec is one of Britain’s biggest property firms and about 60% of its portfolio is in central London. It reported a pre-tax profit of £875m in the year to the end of March.


The company, which owns offices such as Deutsche Bank’s London headquarters and an office complex near St Paul’s Cathedral, reported a loss of £1.4bn the previous year as the coronavirus pandemic shut down offices across the UK.


“Reports of the demise of office working may have been premature, judging by a return to profit for Land Securities,” said Russ Mould, the investment director at AJ Bell. “Astonishingly in central London the company is seeing record leasing levels. In a competitive jobs market where employers probably want their staff in the office at least some of the time, attractive locations with flexible space are a must.”


Landsec said it intends to cash in on the post-pandemic office space boom by investing £3bn in “sustainable London offices and mixed use development” over the next five years.


The company said that it struck a record £63m of office leases in the past year, on average 4% ahead of valuers’ assumptions. Landsec said office occupancy across its portfolio reached 95.3%, “demonstrating strong demand for high-quality space”.


Landsec’s shopping mall portfolio, which includes Bluewater in Kent and Trinity Leeds, also experienced a return to growth in the second half of its financial year.


Like-for-like retail sales were 1.1% ahead of its 2019/20 financial year and occupancy rose 1.7 percentage points to 93.2%, as retailers hoped to take advantage of shoppers returning to malls. Landsec, which paid £126m for an additional 18.75% stake in Bluewater and £426m for a 75% stake in MediaCityUK in Greater Manchester during the year, said that it signed, or is processing, £29m of lettings deals for retail space.


“There has been a recovery in Landsec’s retail locations too as restrictions ease, with the landlord putting effort in making these attractive destinations for shoppers,” Mould said. “Occupancy rates are also up – though this recovery could be cut short as households cut back on spending amid cost of living pressures.”


Landsec’s portfolio of offices and shops increased in value by 11% year on year, from £10.8bn to £12bn.


“Landsec has delivered strong operational and financial results despite the turbulence within the UK economy,” the LandSec chief executive, Mark Allan, said. “The actions we have taken, driven by our strategic focus on three distinct areas have resulted in record leasing in our London office portfolio, a return to growth in our major retail destinations and clear, substantive progress in growing our mixed-use urban neighbourhood portfolio.”


Landsec hopes to sell 21 Moorfields, Deutsche Bank’s new City of London offices, for about £1bn and Allan said that sale is one of “three or four” London office disposals he is considering.


“We continue to recycle capital out of mature assets, while our pipeline now offers the opportunity to invest £3bn in sustainable London offices and mixed-use development over the next five years at attractive returns,” he said.


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Office rents soar along Elizabeth Line route


The long-awaited arrival of the new Elizabeth Line has tempted companies to base themselves outside of London’s traditional office hubs, sending office rents soaring in some of the capital’s lesser-known business areas.


The Elizabeth Line, or Crossrail as it was originally known, opens to the public today, having first been announced 14 years ago. The 62-mile line runs through the middle of London, connecting Berkshire to Essex and southeast London. Commuters will be able to get from Paddington to Canary Wharf in 16 minutes — about half the time it previously took.


In anticipation of its opening, in recent years companies have ventured farther away from the usual office bases in the City of London or the West End, which has put a rocket under rents in some of the capital’s smaller office markets.


Since 2008, when Crossrail was first announced, rents in Clerkenwell and Shoreditch, on the northern and eastern edges of the City, have surged by 123 per cent, according to data from Cushman & Wakefield, the property agent.


In Paddington, where the new station is the size of three football pitches, rents on prime office buildings have risen 45 per cent over that time.


By contrast, Cushman found that office rents in the City have moved 21 per cent higher since 2008. In the West End they have nudged up only 2 per cent. Historically these two areas were London’s two best-performing areas for office rents.


Patrick Scanlon, head of UK offices insights at Cushman & Wakefield, said that the building of the Elizabeth Line had helped in “changing the dynamic of London’s commercial real estate market”.


He added: “It encouraged occupiers to consider new locations and real estate developers to deliver high-quality office schemes in new areas of the capital which had previously been largely ignored. Much of this was due to the prospect of improved connectivity from east to west.”


There has been much talk among the big developers and landlords of a “flight to quality” after the pandemic. Businesses are keen to use modern, best-in-class offices to attract workers amid a hot jobs market, while having the most sustainable space possible is helpful for their net zero ambitions.


However, Ben Cullen, Cushman’s head of offices, believes that “quality” also encompasses a building’s location and proximity to large transport hubs.


He said: “We have seen a clear flight to quality in the office occupier market, which goes beyond the quality of the building; it incorporates the quality of the local area, including places to socialise and, crucially, transport.”


Underlining the importance of connectivity, office rents in King’s Cross and Southbank, with London Bridge on its doorstep, have also outperformed, Cushman found.


Cullen said that offices in Clerkenwell and Shoreditch had been the “real Crossrail winners” and he expects that rents there will continue to outperform the wider London market.


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Death of the office greatly exaggerated, says landlord


The boss of one of London’s biggest landlords has conceded that offices will probably never again be as busy as they were before the pandemic.


Businesses have changed the way they operate, Toby Courtauld, chief executive of GPE, acknowledged, although he is also adamant that those who predicted the “death of the office” have been proved “plain wrong”.


GPE, which owns a multibillion-pound portfolio mainly comprised of offices in the capital, swung back to a profit in its latest financial year on the back of a record year of leasing.


It turned a profit of £167.2 million in the year to the end of March, having fallen to a loss of £201.9 million in the previous 12 months. The recovery was driven by an uplift in the value of its property portfolio, which rose 6.1 per cent across the year to £2.65 billion.


GPE’s net asset value increased by 7.2 per cent to 835p, although its shares continue to trade at a steep discount to that. Yesterday the stock fell 34p, or 5 per cent, to 640p.


Formerly known as Great Portland Estates, it became a quoted company in 1959 after the acquisition of the property holdings of Basil and Howard Samuel, cousins of Lord Samuel, the founder of Land Securities. About 80 per cent of GPE’s assets are central London office buildings, including 18 Hanover Square in Mayfair, home of KKR, the private equity firm, which has a 5.4 per cent stake in its landlord.


In the year to March, the group agreed a record £38.5 million of new leasing deals, with tenants on average paying nearly 10 per cent above what bosses expected this time last year. Courtauld, 54, said that London’s “magnetism” was very much still evident.


“Businesses have been coming out of Covid and growing again and I think they recognise the value of a place like London,” he said. “It’s a melting pot of talent, it’s fun and it’s where the kids want to be.”


Occupancy at GPE’s office buildings is picking up although it is still below where it was pre-Covid and Courtauld is “not sure that we’ll get back there”.


He said there has been a “really interesting change in approach” in how occupiers use their offices, including as a showroom to attract new staff.


All of the big landlords have reported in recent months that businesses now want “prime” office space. Rents for those best-in-class spaces are likely to keep on rising, GPE says.


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High-end London offices still in demand despite hybrid working


Companies have been snapping up new high-end office space at record levels, according to the boss of Landsec, as the great return to the office continues.


The company reported leasing deals for central London office worth £63 million in the year to 31 March at average let prices 4% higher than valuers had predicted.


Overall, Landsec’s offices are now 95.3% full, the company said.


Mark Allan, chief executive of Landsec, said: “People’s use of the office has changed and people are taking advantage of remote working.”


But the so-called “war for talent” was ensuring that high-end office space remained in demand.


He said employers wanted to be “offering the right quality of space so people can come in and collaborate and do things they can’t do from home”.


Companies are keen to sign up for flexible space that can be used for different things, he added, leading to polarisation in the market where lower quality space was still suffering.


Landsec also reported an improving picture for its retail assets, with occupancy up to 93.2%.


Plans to encourage shoppers back into stores, such as charging for online returns, were increasing footfall, Allen said.


Landsec increased its stake in the Bluewater shopping centre by a further 18.75% during the year and ploughed £426 million into acquiring part of Media City in Salford, where it plans further redevelopment.


Its net assets per share, which indicates the underlying value of the business, rose from 975p to £10.70 during the year.


Elsewhere in the sector, West End landlord Shaftesbury has bought the lower floors of 92-104 Berwick Street in Soho for £27.5 million.


The space is currently mostly vacant, but Shaftesbury said it felt confident about letting the space given the popularity of the area and the upcoming boost from the new Elizabeth line.


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Remote workers bag a desk at their local supermarket


Working from home was so 2020. This year, people want to work from their . . . local supermarket?


So says IWG, the FTSE 250 office landlord, which is opening a new flexible office space at a Tesco Extra in New Malden, south London.


The store’s upper mezzanine level — totalling 3,800 sq ft — has been fitted out with desks, co-working spaces and a meeting room. The office, which will be run under IWG’s Spaces brand, will open to workers towards the end of this month, although they won’t benefit from in-store perks or discounts.


“Convenience is, for some, not leaving their house or going to Starbucks,” Mark Dixon, the founder and chief executive of IWG, said. “For others, who don’t want the distractions that you get at Starbucks but still want to work locally, what better place than the local supermarket?”


Dixon, 62, plans to open more than 1,000 new offices this year and said he has been inundated with requests from retailers looking to repurpose their surplus space.


It was Tesco that first approached him about the possibility of opening an office in its store. “We’re talking [with Tesco] about other stores and we’re talking with other retailers as well,” he said. Dixon accepts the concept will raise eyebrows among some, but points out in-store cafés were a novelty a couple of decades ago. “Think of all the other things that you have in a supermarket today that you didn’t 20 years ago,” he added.


Dixon founded IWG, or Regus as it was then, in 1989. It is now the world’s biggest serviced offices provider, with about 3,500 centres in 120 countries. Dixon is its largest shareholder, with a 28.6 per cent stake worth close to £700 million.


Louise Goodland, head of strategic partnerships at Tesco, said it was “always looking to serve our customers and communities better”.


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Death of the office? Don’t tell City businesses as leases shoot up in the first quarter


London’s office market looks fitter and healthier than ever before, according to the two of the UK’s largest property firms, despite the lures of working from home.


Take up of office leases in central London shot up 89 per cent year-on-year in the first quarter, CBRE data shared exclusively with City A.M. revealed. 


City firms to bet on the office return include law firm Hogan Lovells, which pre-let the largest space in the period, with 280,000 sq ft at 21 Holborn Viaduct, EC1. 


There was a particular uptick in smaller deals typically seen before Covid, CBRE’s head of London office brokerage, Rob Madden, said.


A total of 1.7m sq ft of deals under 20,000 sq ft were signed across 351 individual transactions. This was just over a third more than transacted in any other quarter since Covid hit.


Office space under offer in the heart of the capital totalled 3.9m sq ft, above a 10-year average of 3.3m sq ft.


Meanwhile, London-headquartered Savills has reported office demand topping a five-year high.


Nearly a third of office occupiers are increasing the amount of space they are after, data from Savills found, as businesses look to scale their headcount and operations post-pandemic. 


The majority (41 per cent) of central London occupiers are looking to double the amount of space they currently occupy – which is around 10,000 sq ft.


“We continue to see a rise of inward movers into London’s rapidly emerging new office districts,” said Jon Gardiner, head of central London office leasing at Savills, citing Swiss pharmaceutical giant Novartis relocating to new offices at White City from the Thames Valley in 2020.


“These companies see London as a key tool in the war for talent,” Gardiner explained. “They are looking for amenity rich, well connected urban campuses.”


While the battle for top-talent shows no signs of slowing, London commercial property analyst at Savills, Victoria Bajela, suggested that the spiralling cost-of-living crisis could see occupiers opt for smaller but better-quality spaces – though this is a trend that is yet to appear.


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GPE to more than double London flex offering to 600,000 sq ft


GPE has said it wants to more than double its flexible workspace offering in London.


The FTSE 250 development company has announced its ambition to increase its flex portfolio in the capital from 250,000 sq ft currently to around 600,000 sq ft.


The company said it recognised that flexible offices were becoming the mainstream options for businesses seeking under 10,000 sq ft of space, and that it wanted to offer greater choice to customers.


Simon Rowley, director of office leasing and flex at GPE, said: “We have been delivering flex space since 2018 and the existing portfolio is well suited, with the service already available in over 11 London locations, covering some 250,000 sq ft.


“Our ambitions more than double our existing flex footprint, with the opportunity to grow further by buying buildings. We’re off to a great start having recently acquired 7/15 Gresse Street, in the heart of Fitzrovia, for our fully managed offer to meet the deep customer demand and deliver a market-leading service and amenity provision in a well-designed, tech-enabled and sustainable space.”


The plans include offering three rebranded products, a ‘ready-to-fit’ option, a fully furnished ‘fitted’ option and ‘fully managed’ workspaces.


GPE’s current London flex offering includes 16 Durfour’s Place, Soho, The Hickman in Whitechapel and Elm Yard in Clerkenwell.


Steven Mew, customer experience and flex director of GPE, said: “Our goal is to provide greater choice for our many customers and meet the increasing demand for flexible workspaces within our portfolio that’s already packed with opportunity.


“As the world continues to return to offices after the pandemic, businesses are looking to achieve a greater degree of agility, a larger number of employees want hybrid working and technology is playing its part as we steer away from the old ways of working towards smarter and sustainable workplaces.


“And it’s not just about SMEs, larger corporates are increasingly utilising flex space as part of their real estate strategies.”


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UK office space demand bounces back in 2022, says RICS


The start of 2022, saw an increase in the demand for office space, as new tenants look to rent more UK commercial property, according to the RICS Commercial Property Market Survey, Q1 2022.


Respondents to the survey saw a notable increase in UK office space demand in Q1 2022 with the net balance improving to +30% from a flat picture at the end of 2021.


A considerable change in sentiment was also seen in the retail sector, as occupier demand moved into relatively neutral territory (-1% net balance), the first time this reading has been neutral or positive since the beginning of 2017.


The commercial property sector as a whole has reported an increase in occupier demand at the all-sector level (retail, office and industrial uses).


Investor enquiries also rose in the first part of 2022, with the strongest figure since Q3 2015. Moreover, for the first time since 2017, investment enquiries are now in positive territory across each of the three traditional market sectors separately (office, industrial and retail).


Investor demand for office space rose in 2022


The investor demand for office space rose from a net balance of +5% at the end of 2021 to +23% in Q1 2022, and the net balance of respondents predicting a rise in capital values for the prime office sector is the most positive since Q4 2019 (+37% net balance).


With the jump in occupier demand for new office space, rents are expected to rise with a net balance of +19% expecting a rise, compared to +7% in the last quarter.


On a regional level, rent for office space in central London are anticipated to outpace most other UK regions, while the South East remains the only region in which secondary office space is predicted to see growth.


The latest research published by RICS in March has shown that high-quality and well-managed commercial real estate, such as office space  is integral to levelling up UK towns and cities.


The office sector is showing strong signs of recovery


Tarrant Parsons, RICS economist, commented: “The latest survey feedback points to demand from both occupiers and investors gaining momentum over the quarter, with the office sector in particular now showing signs of recovery.


“This has led to an upgrading in expectations for capital value and rental growth across prime offices, while the prolonged downward trend in portions of the retail sector also now appears to be easing.


“That said, given the current headwinds facing the UK economy in form of sharply rising energy prices, higher interest rates and general cost of living pressures, there is understandably a lot of caution regarding the potential impact this could have on market conditions going forward.”


The report has emphasised the key role the commercial property sector plays in the UK


Jonathan Hale, head of government affairs at RICS, added: “UK commercial property is clearly still attractive to investors and UK Government should work across the country to engage with the sector to build on this positive outlook.


“The recent RICS commercial real estate impact report emphasised the key role that the commercial property sector currently plays in the UK and its future role in driving forward economic recovery across the UK.


“As town centres, high streets and offices start to recover following the pandemic, a thriving commercial real estate industry will be crucial to support the government’s levelling up and net zero ambitions in the months ahead.”


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Race for space: Central London office demand back on track


London’s office market looks fitter and healthier than ever before, according to the two of the UK’s largest property firms, despite the lures of working from home.


Take up of office leases in central London shot up 89 per cent year-on-year in the first quarter, CBRE data shared exclusively with City A.M. revealed. 


City firms to bet on the office return include law firm Hogan Lovells, which pre-let the largest space in the period, with 280,000 sq ft at 21 Holborn Viaduct, EC1.


There was a particular uptick in smaller deals typically seen before Covid, CBRE’s head of London office brokerage, Rob Madden, said.


A total of 1.7m sq ft of deals under 20,000 sq ft were signed across 351 individual transactions. This was just over a third more than transacted in any other quarter since Covid hit.


Office space under offer in the heart of the capital totalled 3.9m sq ft, above a 10-year average of 3.3m sq ft.


Meanwhile, London-headquartered Savills has reported office demand topping a five-year high.


Nearly a third of office occupiers are increasing the amount of space they are after, data from Savills found, as businesses look to scale their headcount and operations post-pandemic. 


The majority (41 per cent) of central London occupiers are looking to double the amount of space they currently occupy – which is around 10,000 sq ft.


“We continue to see a rise of inward movers into London’s rapidly emerging new office districts,” said Jon Gardiner, head of central London office leasing at Savills, citing Swiss pharmaceutical giant Novartis relocating to new offices at White City from the Thames Valley in 2020, and Microsoft looking for 500,000 sq ft in its HQ move from Reading.


“These companies see London as a key tool in the war for talent,” Gardiner explained. “They are looking for amenity rich, well connected urban campuses.”


While the battle for top-talent shows no signs of slowing, London commercial property analyst at Savills, Victoria Bajela, suggested that the spiralling cost-of-living crisis could see occupiers opt for smaller but better-quality spaces – though this is a trend that is yet to appear.


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Demand for offices in the Square Mile hits new record, says Savills


The demand for offices in central London has hit a new record, according to Savills, dismissing concerns that working from home has taken over the Square Mile.


With an eyewatering £3.3bn having changed hands in the City over the past three months, the record figure is nearly a third higher than the previous record in the first quarter of 2007.


The £1.2bn deal for UBS’ Broadgate HQ to LaSalle Investment Management on behalf of NPS – the second largest single transaction on record in the City – buoyed the marked activity in London’s business district.


It signals a massive year-on-year increase of 540 per cent. A trend that has crept to the West End, which has been the heart of more than 260 per cent surge in appetite this quarter, Savills added.


Activity in the West End was dominated by domestic buyers, in terms of numbers, who accounted for some 60 per cent of transactions in the first quarter – while the City continued to catch the eyes of global investors.


The size of assets available in the Square Mile proved particularly enticing on the global real estate plain, the London-headquartered real estate firm said, despite geopolitical and inflationary headwinds.


Stephen Down, head of Central London investment at Savills, called the figures “nothing short of stellar”, a return to “more normal” trading conditions following pandemic restrictions ushered in greater levels of investment.


And the horizon looks bright for central London office property, with a strong volume of stock.


However, “the increased cost of finance and macro-political uncertainty is having a greater impact on buyer decisions in London just as it is around the globe,” Down cautioned.


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The World’s Most Beautiful Co-Working Spaces


Working patterns have been thrown up in the air over the past two years, and we’re just starting to see where the pieces have fallen. With a more nomadic, flexible approach seemingly set to stay, co-working spaces are increasingly looking like the answer to many people’s work-life balance, Many businesses are looking to great design as a differentiator – a way to pull in new clients and keep them happy – so Portaire has scoured the globe to find the spaces that have best responded to workers’ needs, both creative and practical.‍


1. LABS Victoria House, London

This imposing classical building takes up a whole block in central London’s Holborn, and inside, the interiors are just as grand, with a soaring travertine-clad lobby setting the scene. Architect Hutchinson & Partners has remodelled the building, updating an earlier rethink by Will Allsop that included, among other things, amorphous meeting pods hanging from the ceiling. The pods have stayed but now there’s a sophistication and a material warmth to the scheme: bronze and stone complement the travertine, curving timber partitions separate out smaller meeting booths, and marble and timber kitchens add a touch of domesticity. As well as workspace, Victoria House has a ‘wellness suite’, space for larger meetings and events, and a café in the lobby.


2. The Malin, New York

Opened in November 2021, The Malin taps into the hospitality design experience of interiors studio Fettle, and is clearly taking its cues from the more service-focused hotel industry: a concierge-like executive assistant can run errands in the area and there’s even a small retail space, just like the best boutique hotels. The interiors co-opt the cream of US design, both mid-20th-century and contemporary, from Eames chairs to lighting from Roll & Hill and wallpaper from Calico, with monthly changing artwork courtesy of e-commerce site Platform. Richly coloured upholstery – dark green, blue and mustard – sings out against the white walls and steel columns, while the timber desks, doors and windows add warmth.


3. Crew Collective, Montreal

Architect Henri Cleinge had some pretty impressive raw material to play with when he took on this project to create a café and co-working space from the former Royal Bank building in Old Montreal, builtin 1926. The ground floor main banking hall has 15m-high ceilings and 1,100 square metres of space, framed by enormous arched windows and topped by an ornate plaster ceiling. The row of original bank teller stands acts as a barrier between the central café and the conference rooms behind it, while freestanding brass-plated minimalist enclosures host space for quieter working: the brass picks up on the existing lighting fixtures and detailing of the teller windows.


4. Neue House Bradbury, Los Angeles

Neue House has locations in Los Angeles and New York (with Miami coming soon), but none so grand as LA’s Bradbury Building, an ornate architectural masterpiece originally built in 1893. The co-working space takes up the entire second floor and is the work of interior design studio Design Agency, which completed the project in early 2020. The studio opted for simple, modern calming spaces that complement rather than compete with the building’s ornate atrium with its marble staircases, elegant iron work balustrades and huge roof light. A pastel palette, parquet floors and softly draping neutral linens at the windows lend a bright and breezy feel. The Wyman Bar, named after the building’s original architect, is where members go to relax after a day at the coalface, and features a marble-topped bar, ruby-red bar stools and soft globe lighting by Lee Broom.


5. Douglas House, London

The Office Group (TOG) is no young upstart, having blazed a trail for design-led co-working spaces in London since its founding in 2004. For Douglas House, which opened in early 2021, it once again called on the talents of Sweden’s Note Design Studio, which was charged with turning an uninspiring office building in the West End into something with a bit more personality. Note describes the effect as a “gentle punch”: a huge desk clad in blue Alpi veneer (created by Ettore Sottsass in the 1980s and forever synonymous with playful postmodernism) greets visitors, while an undulating wall of glass blocks runs the length of the ground floor, concealing a bank of meeting rooms. Feeling burnt out? Visit the Recharge Room, a womb-like relaxation space with a halo light installation on the wall, or the OxygenRoom, full of greenery and daylight.


6. Liberty House, London

Another project by The Office Group, this space shows how the parent company creates a sense of place that responds to the architecture and the wider neighbourhood. Liberty House is on Regent Street, adjacent to the revered Liberty department store (it was originally used as stock rooms, and to house the store’s workers) and aims to reflect the creativity and craftsmanship of one of London’s best-loved retail experiences. Designers SODA Studio took some elements of the palette from Liberty’s famous textile designs, working with artist Adriana Jaros to create the colour scheme, and the spaces are full of soft, sculptural furniture from the likes of Gubiand Sovet. The interiors also have a strong sustainability focus, with flooring made from timber offcuts and surfaces made from Altrock, which resembles large-scale terrazzo and incorporates marble offcuts.


7. The Bureau 25 rue du 4 Septembre, Paris

Located between the Place de l’Opéra and the Bourse, this is The Bureau’s third location in Paris. Lauded French architect Franklin Azzi devised the interiors, looking not to the building’s 19th-century roots but mid-20th-century America and the work of Frank LloydWright, with swish oak panelling and built-in joinery, as well as the 1970s, resulting in mirrored strips on one wall and a sunken conversation pit. Cult lifestyle blog The Socialite Family sourced the furniture, lighting and accessories (as it has for all of The Bureau’s locations), including an imposing Murano glass chandelier hanging above the meeting-room table, a vintage Osvaldo Borsani piece. A leafy outdoor patio provides a secluded space to unwind and there’ salso an on-site restaurant and gym.


8. Soho Works White City, London

Laptops are frowned upon at Soho House, so in 2015 the private members’ club group bowed to inevitable demand and moved into the co-working industry, giving its loyal members somewhere to work as well as play. Soho Works now has eight locations in the UK and US, all based within or close to its houses and featuring the same colourful, comfortable and eclectic styling, designed by the in-house team. The White City outpost in West London is based in Television Centre, former base of the BBC, and unsurprisingly has more of the feel of a gorgeous hotel lounge, mixing vintage, modern and bespoke pieces, while glazed partitions and large timber shelving units breakup large space into cosy corners.‍


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The boss of London’s oldest office provider returns from retirement to drive the City’s bounce-back


As we passed the two-year anniversary of the first lockdown last month, City A.M. sits down with the CEO of London’s oldest office provider, who came out of retirement to drive the business’ post-Covid recovery.


Shedding light on how the business and City has suffered, Argyll CEO John Drover reveals to this paper how his company plans to build back and shape the pandemic recovery.


Drover, as the chief executive of Argyll, which has over 30 premium flexible workspaces as a landlord to 8,000 professionals across the City and wider capital. has a familiar face in the City since the 90s.


He saw the business through the GFC and dotcom crashes but returned from retirement this year to lead its pandemic bounce-back, so has a fascinating story to tell.


For example, Pret A Manger’s index shows the City of London is only at 76 per cent of pre-Covid levels, a sign that workers are trickling rather than flooding back to the Square Mile.


However, Argyll’s occupancy stats present a fascinating counter-view: some of its buildings west of the City have been at 100% occupancy throughout the pandemic and buildings in Mayfair are already at 80% and rising. London is bouncing back but is its central hub moving from east to west?


You returned from retirement to get Argyll through the pandemic. Given you saw the business through the GFC and dotcom crashes, what lessons did you learn and how have they been applied to the business’ pandemic bounce-back?


You’re right, I was part of Argyll (then called London Executive Offices) as it navigated these various crashes in the early 00s. I came out of retirement last year because I saw a great opportunity to rebuild and grow Argyll into London’s finest flex office business.


The key takeaway from these downturns that I took on board when tackling Covid-19 was the importance of a diverse customer base and the ability to respond to a crisis quickly.


When the GFC struck, we were more prepared, as we had diversified our client base with smaller space occupiers across a wide range of sectors. As a result, occupancy was far more protected in the GFC.


Now, looking at the effects of the pandemic, Covid-19 hit all sectors at the same time with little warning; overnight, businesses left their desks en masse to work from home. By the time I returned to Argyll in February 2021, our occupancy had fallen to below the levels of the dotcom crash, so I anticipated a 3-year recovery in line with previous downturns.


However, the bounce-back looks set to be far quicker than this – we predict to be back at pre-pandemic levels by this summer, equating to a fast, 2-year V-shaped recovery. In part, this rebound is due to the fact many companies didn’t have their own downturns – Covid just forced them to operate from home for a while.


I understand that some of your buildings in the west of the City have been at high occupancy rates throughout the pandemic. Which areas of London are bouncing back fastest and why?


Yes, our offices in Chelsea and Belgravia retained high levels of occupancy throughout the pandemic and this probably reflects the nature of our customers in these areas – small boutique firms with employees living a short distance away from the office. Post-lockdown, these areas have continued to thrive while the City and West End caught up very rapidly.


Does this indicate that London’s financial hub may move from east to west? And what does it reveal about the post-pandemic strategies of London’s businesses?


The truth is that boutique financial services firms have always clustered in the West End and will continue to be drawn to the area due to the amenities and brand credentials it offers them.


Conversely, larger financial institutions will remain in the City due to the availability of large office spaces.  Many firms have missed the ability to meet with clients, network with peers and develop new recruits during the pandemic – all things that an office in prime Central London can offer on its doorstep.


Is flexible working just a fad?


Far from it. Flexible working is not a new concept in London. Long before ‘Zoom’ or ‘WFH’ appeared in the public consciousness, many of the capital’s finance professionals were working flexibly. Their deal-orientated work meant they would be in the office when a deal was closing or for client meetings, but could work from home on quieter days.


At Argyll, our clients have been working this way for over 20 years. Many have operated to their own schedules since acquiring their first BlackBerrys in 2003 and our offices have always been quieter on Mondays and Fridays, so we are not seeing any dramatic ‘flexible working’ sea-change post-pandemic. Flexible working has been here for some time and is here to stay.


Interestingly, we haven’t seen our customers demand more flexibility since the pandemic. We have been offering hybrid and hot desking solutions over the last year but overwhelmingly these small working groups still want their own private offices where every member of the team has a desk to work from.


Ultimately, why are financial service firms sticking with bricks and mortar and investing in their London HQs?


I think it comes down to the nature of the industry. The financial world is built on relationships, so the face-to-face communications with colleagues and clients, facilitated by office working, is vital to their day-to-day operations. It is clear that remote working has lost its charm for many and London’s professionals are eager to make the most of the collaboration and creativity that being in the office together again can enable.


Having a prestigious address is invaluable in building and maintaining a credible reputation – something that remote working during the pandemic has only underscored.


Given this, the future of work for many London businesses is simple: occupy great buildings in prime locations that combine first-class customer service and excellent amenity space with contractual flexibility, all for a simple monthly fee. In short, businesses pay for what they want, when they need it, but do not compromise on facilities, location or productivity.


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Bureau Recruits Well-Known City Agent


Boutique office advisory business Bureau has appointed well-known City agent Stephen Foster as a director.


Foster has 14 years’ experience in the central London office leasing market and has spent the last nine years at HK London, advising clients including Helical, Blackstone, Columbia Threadneedle, Berkeley Group and LaSalle Asset Management.


In his role he will continue to advise central London investors, developers and occupiers on leasing strategy, disposals and acquisitions.


Bureau was founded in 2021 by flexible office sector expert Catherine Alexander, formerly of Gryphon Property Partners, and a director at JLL. Ed Huggins of Landmark and Gryphon joined the firm as director in September.


Alexander said in a statement: "Stephen brings vast experience and an enviable reputation as a City and City Fringe office agency specialist. He will be spearheading our leasing team, harnessing the valuable expertise he’s acquired over the last nine years as director at one of London’s leading niche agency firms whilst utilising Bureau’s close links with the serviced office sector."


Foster added: "I’ve worked with Catherine and Ed for a number of years and admire their in-depth market understanding and forward-thinking advice. The flexible and traditional office leasing markets have converged, as a result of rapidly changing business conditions for occupiers and an increasing need for flexibility; requiring a cross-market approach. With our understanding of how these needs can be met, we plan to provide significant value-add for our clients."


Other senior hires are expected to be announced later this year.

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Currys to vacate HQ in switch to flexible working for office staff


As part of its new model Currys will provide its 1,400 corporate workforce with WeWork All Access passes, enabling them to visit over 50 UK WeWork locations.


The Sunday Times reported Currys will vacate its head office in Acton as part of the move to flexible working.


Additionally, to support regional hubs, Currys will also be refurbishing a number of spaces in its own stores across the UK, giving colleagues even more flexibility about where they work.


Alex Baldock, chief executive of Currys said: “We are not just paying lip service to hybrid working as we come out of the pandemic. We have listened to our colleagues, who have been outstanding through Covid’s many challenges, and have implemented the changes they wanted to see.


“Our workspace of the future embraces what genuine hybrid working means, not just where you work, but how you work. We want to bring our people together again, but in a way that works for them. We are really excited to unlock the potential of truly hybrid working and believe that being innovative today will prepare us for how we adapt to new ways of working in the future.”


Samit Chopra, president and chief operating officer international at WeWork, added: “As more and more companies welcome people back to the office, many are embracing hybrid work schedules that empower people with flexibility to provide new opportunities for teams to collaborate in-person. We continue to see growing demand from forward-thinking companies like Currys, and we are delighted to bring their new hybrid working model to life for their teams.”


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Return of office staff at new high in London after Covid


London offices are fuller than at any time since the start of the pandemic as the return to commuting gathers pace, data has revealed.


Office occupancy reached 42 per cent last Thursday, exceeding the previous highwater mark of 40.1 per cent recorded on October 14 last year when London was still opening up after the third lockdown. Average occupancy was about 63 per cent before the first work-from-home order was issued by Boris Johnson in March 2020, but immediately fell to close to below 10 per cent.


Commuters have only slowly gone back to their pre-pandemic habits and working from home still remains the favoured option for the majority on Mondays and Fridays.


According to the Freespace Index, a measure compiled by workplace sensors company Freespace, occupancy last week was 25 per cent on Monday, 40 per cent Tuesday, 36 per cent Wednesday before the 42 per cent peak on Thursday.


However, on Friday it plummeted to just 13 per cent. Across the week as a whole it averages 31 per cent in London, still roughly half pre-pandemic levels.


Freespace boss Raj Krishnamurthy said: “It seems there’s plenty of life in the office yet. We are heading in a positive direction with occupancy, but this has now become more purposeful in terms of how people want to work, what spaces they are using, and what the overall purpose of the office is.”


Separate data from sandwich chain Pret a Manger also showed that sales in its central London outlets were fast returning to pre-pandemic levels. Last week they were slightly ahead of the January 2020 benchmark while in the City they were at 88 per cent of “normal”.


Meanwhile a poll by the City of London Corporation found that 72 per cent of full-time workers feel that building business relationships is easier when based in the office.


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London office space provider set to grow as new services launch


London office space provider WorkPad plans to double the size of its business and launch new service lines for landlords and occupiers.


WorkPad has added six ‘big name’ occupiers and completed over forty transactions in the past three months, including household name brands, FTSE 100 companies, design houses and well-known fashion brands.


As a result of the client acquisitions, WorkPad is adding 51,000 sq.ft of office space across its portfolio, split over seven properties.


The new properties will be in a range of locations in Central London, including St. James, Fitzrovia, Marylebone, Bloomsbury, and Farringdon.


CEO Edward Griffin said: “The growth that we have seen over the past three months is the culmination of significant business decisions we have made throughout the pandemic to ensure we continue to service our current landlords and occupiers, and attract new businesses looking for attractive and unique workspaces in prime London locations.”


“Last year, we received a record number of enquiries from SMEs who still see the value of having a London presence for their business and desire attractive workspaces for their clients and employees to enjoy.


“We retained circa seventy percent occupancy during the Covid lockdowns through the provision of short-term agreements, and this has increased to above ninety-five percent across all our nineteen office locations as SMEs benefit from a growing flex market.


WorkPad is launching three new business lines to benefit both occupiers and landlords, which has been made possible by increasing its staff headcount by 60 percent.


For clients looking to move away from the traditional office fit-out, WorkPad will be launching its new Design and Build service, through which the office provider will co-ordinate the whole fit-out and refurbishment process from start to finish with a dedicated project manager and interior design team.


WorkPad will also be expanding its portfolio and asset management arm for landlords through conventional leasing, managed workspace, or serviced workspace,


Edward concluded: “We have been working on these expansion plans for some time and they will ensure we maintain our commitment of providing tailored, high-quality services to our occupiers and landlord clients, such as Grosvenor, The Bedford Estates and Shaftesbury.”


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TOG and Fora reveal merger


The Office Group (TOG) and Fora have agreed a merger with the aim of becoming the premier flexible workspace company in the UK and Europe.


While the financial details of the deal have not been disclosed, the combined group will comprise 72 premier locations totalling 3.1m sq ft across London, Cambridge, Oxford, Reading, Bristol, Leeds, Berlin, Frankfurt, and Hamburg.


The enlarged group also has plans to expand into other European cities.


TOG co-founder Olly Olsen will become executive chairman, Fora co-founder Enrico Sanna will be chief executive, while TOG’s Charlie Green will become president. Katrina Larkin will be chief environment, social and governance officer.


Current TOG and Fora tenants include bp, GSK, Ocado, AMC, Adobe, British Fashion Council, Tortoise Media, among many others.


Olsen said: “The strong strategic and cultural fit between our two businesses and the supportive market dynamics, as more businesses embrace flexible working, make this merger an exciting proposition.


“We have seen a clear and growing need from corporates for better quality environments, with great amenities, beautiful design and that are easily accessible. The combination of our businesses would ensure that we are best placed to meet this growth opportunity in both the UK and Europe, offering existing and potential members even greater choice.”


Sanna added: “The combined portfolio of TOG and Fora will meet this need and evolving expectations, offering high quality and flexible locations that are design-led, with a range of services and amenities that are conducive to enhanced employee and business performance.”


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IWG merges digital assets with The Instant Group


IWG announced the merger of its digital assets with The Instant Group with a view to listing the business in the next two years.


Posting improved annual results, the flexible workspace provider said it would invest £270m net cash to buy shares from selling owners and provide growth capital with Instant Group management contributing £50m.


IWG said the deal would form a leading fully integrated workspace platform. Instant Group, which is not publicly traded, operates in 18 countries including in Europe the Americas and Asia.


Instant's management team will run the business and the merged group will probably be spun out in a US or UK listing by the end of 2023, IWG said. The business will offer virtual offices, meeting rooms, flexible workspace and managed offices.


IWG shares rose 12.6% to 261.70p at 08:36 GMT.


IWG Chief Executive Mark Dixon said: "It's a fantastic investment behind a world-class management team, positioning IWG to be a market leader in the digital-led future of workplace platforms. This creates a clear path for value creation and will harness the next generation of digital-native workers."


IWG reported a pretax loss from continuing operations of £259.4m for the year to the end of December compared with a £613.3m loss a year earlier as system-wide revenue dropped 4.2% at constant currency to £2.5bn. The company said it had a strong end to 2021 and excellent momentum in the first quarter of the current year. -

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10 Of The Best UK Co-Working Spaces For Out Of Office Days


While seasoned freelancers may be longtime residents of their local co-working haunt, for many of us, the post-pandemic working life is offering a bold new frontier in our careers. Virtually all Covid-19 restrictions in the UK are now a thing of the past, but living through Coronavirus pandemic has shown us that it's entirely possible for many works to carry out business outside of traditional office environments. As many of us adapt to our newly-vaccinated lives, hybrid working is one change we're taking forward with us into 2022.


Hybrid working models, whereby time is divided between the office and home, are now commonplace where as once you'd likely have been expected to show your face at your business HQ every day. Similarly, there's been an increase in fully remote vacancies, with research showing roles for these positions are increasing at four times the rate of the UK's general job market. It would seem then that workers and companies alike are desiring the freedom to choose where they and their employees are setting up shop for the week.


However, for all the perks a WFH lifestyle brings (later morning alarms, more time for the gym and far fewer sad pre-packaged lunchtime sarnies), we really are social creatures at heart and those water cooler chats just can't be replicated over Zoom, which is why co-working spaces have never been more vital.


These communal office areas have seen a real boom in popularity since the 'stay home' order lifted. They can typically be booked on a daily, weekly or monthly basis, with private offices available for an additional fee. And if you feel most inspired in beautiful environments, you're in luck as there are several incredibly new co-working spaces we're obsessed with.


Far from your overly-cluttered dining room or drab office with those weird fuzzy carpets, many co-working spaces are now a real treat for the senses. Expect thoughtfully-designed, artful spaces full of light, space, colour and texture. It's not unusual for pets to be allowed, too.


Many of the workspace companies featured below are expanding, citing the creation of connection and community spirit as a main focus for 2022 and beyond. Networking opportunities, socials, industry talks and wellness facilities are also commonplace in these spaces, so you can grow professionally, holistically and socially, too. All of a sudden, achieving a better work/life balance doesn't sound so tricky after all.


Here are 10 of the most beautiful and functional co-working spaces throughout London and the rest of the UK, for freelancers, flexi-workers and those that are totally over WFH.


1. Neighbourhood Works, London


We loved the day we spent tucked away at 24-hour co-working space Neighbourhood Works in East London. Part of the Spacemade group, the office has been thoughtfully designed to reflect the area's arty reputation as a hub for creatives. The interiors are an eclectic mix of colour and texture – think bold, contrasting hues, fringed lamps and 1970s-style rugs – plus plenty of leafy pot plants and bespoke pieces by local artists.


We headed down on Valentine's Day 2022 and, in the afternoon, we were treated to a delicious selection of themed cupcakes to tuck into, along with unlimited tea and coffee.


Community spirit is a real focus here. Each member is given a voucher to spend with Beam; a platform that crowdfunds employment training for the homeless. The space also hosts plenty of community events for members and, sometimes, the general public. Expect guest talks, workshops and networking events from company founders, industry experts, and fellow members, among other fun stuff.


As for actually getting down to work, there are various bookable meeting rooms, phone booths, communal tables and cosy corners – we had a thoroughly productive day.


2. Fora, London


If you want to walk into work every morning and feel inspired, book a desk at one of Fora's stunning 13 co-working houses (with two more opening later this year). Each office has been painstakingly designed to honour the heritage of the existing building, with its own unique decor scheme, while still retaining Fora's unmistakeable aesthetic.


There's a host of gym and other wellness facilities at every space: each has a gym with cardio machines, weights bench, dumbbells, tension bands, a Swiss ball, Yoga mats and blocks. Several have additional gear including TRX suspension training, squat racks, a double cable machine and even a ski trainer. You can also book PT sessions, take part in a group exercise class or join the regular pilates, yoga or barre sessions hosted in select locations (your membership allows you to join these even if they're not at your regular spot).


Kitchens are fully stocked with tea, coffee and the odd treat. As for our favourite little touch? Some locations, like Wells Mews in Fitzrovia, have their own vertical salad gardens that can be periodically harvested by members to put in their lunches or take home.


3. Distil Co-Working, Bristol


Bristol-based freelancers: we think you'll struggle to find a co-working spot better positioned to take advantage of all the city has to offer than Distil, located right in the centre of the old town. Foodies especially should be tempted – this joint opens out right onto St Nicholas Market, with its wealth of street food stalls to work your way through every Tuesday and Friday.


As for the space itself, pale wood desks, open shelving, an abundance of plants and soothing sage green accents give it a breezy, Scandi feel – and there's a bar, too, ready for post-work networking with your new deskmates.


All tariffs come with unlimited free tea, coffee, fruit and a bar allowance for when you fancy something stronger come 17:30. If you prefer curling up on the sofa to work (some WFH habits die hard), the bar also has hot-desking facilities, priced at just £10 per day or £80 a month.


But the best bit has to be the open fire that roars all day during the chillier seasons; certainly a good sweetener for when winter hits and it becomes tougher to head out the door in the morning. Knowing that you'll get to snuggle up in a cosy chair by a crackling log burner makes the prospect of getting out of bed much more palatable.


4. Colony Astley, Manchester


It's true that Manchester-based co-working group, Colony, lacks a robust community events programme like some of the others on this list. However, what it lacks in extra-curricular offerings, it make up for with its truly beautiful aesthetic.


Walk through any of the doors in its four city centre locations and you'll be greeted with real private members club vibe; a clever mix of colour, texture and quality finishes that we could certainly get used to settling down to work in every day.


Saying that, there is a discount card available for members, offering perks at a range of local businesses – extended happy hours, discounted gym memberships and even 15% off at a local engagement ring shop, too.


5. AndCo, London


This is a great idea: AndCo is essentially the Airbnb of workspaces. Sign up to its £20 a month service and you'll get access to over 400 places to set up shop throughout London through its handy app. This is much cheaper than a typical co-working space desk and it gives you an excuse to check off more new haunts from your list to try.


As well as cosy cafes and hotel bars, there are a wealth of pubs and restaurants, perfect for lunch meetings with clients, where you can write up your notes without having to head off immediately.


When we gave it a go, finding, booking and cancelling a slot couldn't be easier and some venues offer a discount on food and drink while you're in residence. There are lots of spots outside of central London too, so you should find something close to home, even if you live out in the suburbs.


6. Platf9rm, Brighton


Platform 9 (or Platf9rm, as it's actually styled) nails the social side of creating a truly collaborative co-working space – and an aesthetically pleasing one, at that. A thriving calendar of networking events, coffee mornings, yoga and socials – we're suitably intrigued by Tipsy Illustration Games – will ensure you're always sat next to a familiar face during the daily grind, despite not technically being colleagues. After two years of Covid restrictions, that's something we could all do with a bit more of.


There are two spaces, one in Brighton and one in Hove, but most of the events are held in the original central Brighton spot in the Tower Point block, five minutes from the station. An onsite kitchen/cafe, open every Thursday to Sunday, hosts its own roster of events, live music, comedy nights and talks, along with regular foodie pop-ups with local chef talent.


As for the workspace itself, there are plenty of desks, nooks and meeting rooms for you to book out, with a range of flexible tariffs depending on your needs. Free coffee, tea and refreshments from local Sussex suppliers is included, too. Hopefully we'll actually get some work done at some point.


7. Halkin, London


If you need a centrally-located base to hunker down and get some stuff done, try one of Halkin's eight spots throughout Mayfair and the City (they also have a space in Watford). Every office has a quiet office room to crack on with your daily tasks, plus bookable private meeting rooms and smartly outfitted breakout areas to dip into and take your calls.


Free tea and coffee is available at every location, which have been decked out to reflect the local area (we love the deep teals and golds in the decor in its Art Deco outpost in Southwark). We booked a desk at 13 Hanover Square in Oxford Circus, which is right next to the new Elizabeth line station. So, if you're looking for a spot and you live on this new route, this is one office block to consider.


8. Yonder, London


We've not seen anything like this before: Yonder in Walthamstow combines its 20 co-working desks with a wellness studio and a climbing centre. Creatives can hire a permanent spot in its workshop, where you can make friends with the other handy folks who've set up shop; a mix of furniture makers, set designers and carpenters to date.


Head over to the studio on your lunch break or after hours; there's a really interesting mix of yoga, parent and baby and holistic classes to choose from. A post-work sound bath at 17:30? Sounds lovely, frankly. As a bonus, if you need a quick screen break during the daily grind, you can sit and watch the climbers work hard scaling the walls instead.


At £260 a month for a permanent desk, this is one of the more affordable spots we've found for those looking for somewhere to work more frequently than once or twice a week. If you live in East London, it's worth a tour.


9. The Old Print Works, Birmingham


For Birmingham-based creatives, setting up shop at The Old Print Works will ensure a space to get on with your latest project while mingling with likeminded sorts and doing some good at the same time. This former industrial building has been run by charitable organisation Make It Sustainable since 2009. Its aim is to provide a spot for creatives and community-facing businesses to thrive, while running a program of events to celebrate local culture.


Workshops and studios are available for hire, where you'll be sharing space with an existing arty roster of dressmakers, pottery makers, photographers and more. If you just need a desk to crack on, the dedicated coworking hub, The Transfer, can be hired for just £75 a month full-time.


At lunch, you can tuck into tasty homemade fare from the on-site vegan/vegetarian cafe run by arts charity The Gap. Not sure if coworking is for you? Try one day free or your first week for just £5.


10. WeWork George Street, Edinburgh


No co-working space roundup would be complete without the inclusion of at least one spot from OG office share company, WeWork. Within the UK, the brand has outputs in Cambridge, London, Manchester, Birmingham and Edinburgh – the latter of which we've featured here.


It has everything we've come to expect from a WeWork office: a solid professional events program, a fully-stocked kitchen, a variety of desks and common areas, plus a few non-standard extras. You can bring your dog to work with you, take 10 minutes to breastfeed privately in the mother's room, or decompress with a lunchtime meditation in the wellness room.


Really, though, the main draw with WeWork is the sheer scale of its operations. With over 800 locations worldwide, true digital natives should consider signing up for an all access pass. This gives you the green light to set up at any of its spaces across the globe – which means it's time to dig out your passport!


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London office space: Canary Wharf makes a comeback


It has become conventional wisdom that the pandemic is bad news for the commercial property sector. The shift to working from home will be partly permanent with people spending only two, three or four days a week in the office. Offices will need to be reconfigured to allow for desk-sharing, an increased number of meeting rooms and improved amenities to make working there more attractive, but overall demand will still be lower. 


The principal victim of the downsizing of space requirements will be the owners of large office spaces into which nobody will be downsizing. The most obvious of these is Canary Wharf, a development based on office spaces of half a million to one million square feet. Perhaps Canary Wharf could even become a white elephant as competition from other modern developments siphons away demand and empty offices put off new tenants.


If this is what investors believe, it is nonsense. Tenants are moving in, not out. Societe Generale arrived in 2020 and the European Bank for Reconstruction and Development EBRD will do so this year, “plus half a dozen smaller tenants in the last year”, according to Howard Dawber, the managing director of strategy at Canary Wharf Group (CWG). US banking giant Citi is spending £100m revamping the 200-metre tower it bought as its Europe, Middle East and Africa headquarters in 2019 for £1.2bn. Moreover, CWG is adding five million square feet of new space to its existing 21 million. This is mostly in smaller buildings with “state-of-the-art” office space of 100,000 to 200,000 square feet, competing with the More London development near Tower Bridge. This appeals to smaller occupiers, including specialised buildings for the tech and life-sciences sectors.


In addition, Wood Wharf has four blocks of residential flats, both for sale – “selling well” – and rental. So much for the view that everyone wanted to move out of central London. This is part of the diversification of Canary Wharf, which initially focused on the financial sector but is now more broadly spread. Retail and destination leisure space has been expanded catering not just for the 100,000 who work there, but also the 180,000 who live within walking distance.


Customers are coming back


“We have the second-highest footfall of any shopping centre in London and trading is almost back to pre-pandemic levels. Food and beverage outlets, now a major attraction to Canary Wharf in their own right, are even beating the 2019 numbers,” says Dawber. Rumours of the demise of London’s shops and restaurants have also been exaggerated. Many have closed down, but new tenants have moved in to take their place, perhaps drawn in by lower rents.


The switch to cashless trading has been a bonanza for bars, sandwich shops, bakers and other high-volume retailers, increasing service efficiency, reducing the tedious and time-consuming tasks of till reconciliation and the banking of takings. This reduces both till shortfalls and staff requirements. Online shopping has its limitations and may even have reached maturity as a share of spending ,while take-away or home-delivered food can never compete with the middle- or upper-market restaurant experience.


CWG, now owned half by the Qataris and half by the Canadian-listed Brookfield Asset Management, has also moved outside its core area, in recent years developing the “Walkie-Talkie” building in the City and the old Shell headquarters, once voted London’s ugliest building, on the South Bank.


Why is Canary Wharf doing so well? “We went into the pandemic with a shortage of high-quality office space in London,” says Dawber. “The last two years will have brought speculative development to a halt while underlying demand for good space is strong.” It looks likely that the economic data, which shows GDP having recovered to pre-pandemic levels and record employment, is still understating the strength of the London and maybe the whole UK economy.


Canary Wharf can only be boosted by the imminent opening of the cross-London Elizabeth line, which will reduce the travel time to Heathrow to just 38 minutes. The government wanted CWG to contribute £1bn to the cost of a station originally priced at £1.2bn. The group offered to take on all the risk of building the station in return for contributing just £150m towards a fixed-price contract. The station was completed on time and on budget for a cost of £550m. The government saved over £750m and CWG’s contribution will have been offset by the value of the 120,000 square feet of retail space built above it.


Not all of London’s office space is prospering. Rents on small, poorly located, outdated tertiary office space have fallen. The demand is for new or refurbished, flexible space that is well located and has good amenities. Demand for tertiary space will pick up as central London returns to normal, but this is not an investable proposition. Unfortunately, CWG is not listed and Brookfield (up 140% in five years) gives only a very diluted exposure. However, if Canary Wharf is doing well, so is all central London property, to the benefit of Great Portland Estates and Derwent London.


Chris J. Ratcliffe/Bloomberg via Getty Images
Money Week (Max King) -


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The central London office property market is bouncing back to pre-pandemic levels


After two years of work from home mandates, the end of 2021 finally saw a strong rebound for Central London office property as people started to return to the workplace. Monthly take-up surpassed pre-pandemic levels for the first time in December 2021, and early figures from January show that trend continuing — proving the resilience of the corporate property market. Take up will likely continue to improve now that plans to drop all remaining Covid restrictions in England have been confirmed.


Analysis by Savills found that in December, monthly Central London office take up rose by 32 per cent month on month to reach 1.39 million square feet. Overall, 2021 saw a take up of 9 million square feet — still 21 per cent lower than in 2019, but almost double 2020’s take up. In January, early estimates suggest take up of at least 536,000 square feet, a number likely to be revised afterwards as the last deals are documented, 12 per cent high than in January 2019.


‘People are back at work, and they’re back in numbers,’ Philip Pearce, head of Central London Offices at Savills, said. ‘And it’s very noticeable in the city how it’s beginning to feel a lot more like normal, or the old normal.’


The influx of people returning to the office has combined with demand for higher quality office space, so competition is steep. And while many companies have significantly grown their workforce over the past two years, new building development has been slowed, creating a tight supply across the city.


Demand has been rising strongly since spring 2021, but December was the largest monthly take up since July 2019.


There is strong demand across the city, but in many areas, supply is governing decision-making, and forcing companies to look beyond their usual region. Around 45 per cent of take up in the second half of 2021 in the City Core Corporation area and its fringe, slightly lower than in the same period in 2019. Meanwhile other regions have seen significant growth: Kensington and King’s Cross have seen take up increase more than ten-fold compared to 2019, while Paddington has seen take up triple.


And this uptick in demand is coming alongside higher standards when it comes to the quality of the property.  In 2019 and 2020, 79 per cent of central London office take up was of Grade A quality. In 2021, the amount of Grade A office take up doubled year on year, accounting for nine-tenths of office take up.


This means companies are prioritising not just the location of their office space, but also the quality of the space to make sure it is conducive with employee productivity and wellbeing, and the building’s energy efficiency and sustainability credentials.


‘There’s a recognition amongst most occupiers that the return to nine to five, five days a week is probably never going to happen,’ Pearce added. ‘And therefore they know they’ve got to earn somebody’s commute.’


As the conversation around remote working and hybrid working has developed, companies have had to adapt their plans and policies — some more easily than others.


As the city began to reopen in late spring 2021, smaller office spaces made up a larger proportion of deals, as smaller companies had the flexibility to adapt their working policies with the quickly-changing health landscape.


But the past six months have seen a resurgence of large deals: both from larger companies committing to their hybrid working, and from companies that had downsized, and now look to reverse that decision, and in Q4, eight per cent of deals were for over 50,000 square feet.


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Fora announces new Mayfair building and pre-let to global investment management firm


Fora has signed on 41,100 sq ft at 20 Grosvenor Street, London W1, and pre-let the entire building to a global investment management firm, Millennium.


Comprising 39,700 sq ft of best-in-class offices and 1,400 sq ft of retail space, 20 Grosvenor Street and 19 Brook’s Mews is a landmark Mayfair building, designed by award-winning architect Flanagan Lawrence and delivered by Grosvenor in 2014. Fora has partnered with Millennium to design and deliver a flexible workspace solution tailored to their precise business requirements, in their own private premises. Fora will manage the building which will deliver in Q4 2022.


Mayfair is recognised as the prime address in London for Private Equity Firms, Wealth Managers and Hedge Funds. A number of major international financial occupiers have headquarters here including Blackstone, KKR and Bain Capital. This significant deal underlines Fora’s commitment to its ambitious growth plans and the central London market.


RX London represented Fora, and CBRE represented the investment management firm in this deal.


Enrico Sanna, co-founder and CEO of Fora said: “We are excited to expand Fora’s portfolio into Mayfair, an important submarket, synonymous with quality and excellence. We look forward to opening this new location, along with five others during the course of 2022.”


About Fora:


Tailored workspaces for forward thinkers, Fora is on an exciting journey to reimagine the working day. Our unique workspaces invite people and businesses to feel 'Wonderful at Work' through conscious design, a curated programme of events and a 360-degree wellness offering.


Since launching in Clerkenwell in 2017, the current Fora network consists of 14 locations across London – including Soho, Spitalfields and Borough – and Reading, with six new workspaces in the pipeline including Cambridge, Oxford and Oxford Street, growing to 20 by the end of 2022. Personalised service, dynamic spaces and enhanced technology have inspired organisations such as Sony and the British Fashion Council to make Fora their workspace home. Whether employed by large enterprises, small businesses, or start-ups, Fora Residents leverage the unique Fora experience to forge connections, feed curiosity, and ultimately feel Wonderful at Work. 


Fora Press Release -

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Canary Wharf rolls out flexible offices after pandemic shakes up work habits


London landlord the Canary Wharf Group is planning to roll out a flexible office service for clients, as the city continues to adapt to the pandemic shakeup to work patterns.


The new service, called MadeFor, will be introduced at 40 Bank Street in Canary Wharf, but could grow to as much as 20 per cent of the group’s portfolio over the next few years, The Financial Times reported.


The firm has already snapped up US lender Citigroup as a client, which is taking 95,000 square feet of space on a temporary basis as it refurbishes its Canary Wharf office building.


Offices leased under the new MadeFor brand will be let on more flexible terms than normal leases and more closely replicate models used by flexible office companies like WeWork.


The move marks a major change of tack for the group, which owns most of Canary Wharf in East London, the home of some of the capitals major financial heavyweights.


Shobi Khan, the group’s chief executive said the move reflected an “evolution of the customer and how they’re thinking about their space”.


MadeFor offices can have “breakout space, collaboration space, anything the company wants”, including beer taps if the tenant requests them, Khan told the FT.


Canary Wharf Group also said it could also improve the emissions profile of its buildings by taking a more hands-on approach to operating them, which could tempt in big name financial firms that are gunning to hit net-zero targets.


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My office is cooler than yours — from Google to Facebook, London’s most enviable workplaces


Is your post-pandemic workplace even worth the commute if it doesn’t have a roof garden, gaming zone and an office dog to welcome you as you arrive at your (plant-filled) desk?


Apparently not, according to staff from London’s top firms. The great office comeback is well under way and companies have been working hard revamping their workplaces.


Think your office is cooler than the rest of London’s? Here’s your competition.


Working from home or homing from work?


After two years Slacking from our sofas, home comforts are a new office essential. Tech firm Cloud Nexus says it redesigned its office “to create the feeling of a home” with corner sofas, games consoles and a Lego zone. PR agency Emerge’s revamped Soho office features Instagrammable living room sofa areas, a farmhouse-style kitchen table, a ‘card wall’ stocked with cards and stamps and even a digital fireplace to maximise cosiness. CEO Emily Austen says she encourages the team to send at least one letter a week, eat lunch together every day and enjoy regular after-work drinks from the office bar.


Austen’s isn’t the only company using foodie treats to sweeten the deal of returning the office. Facebook reportedly offers free pick ‘n’ mix, Hackney creative workspace Eat Work Art has access to its own refill shop where staff can stock up with plastic-free products, and communications consultancy Woodrow is one of dozens of companies offering a free organic breakfast bar for employees each day of the week.


CEO Charlie Tarr personally serves his team a cooked breakfast every fortnight too boost the home-from-home feel.


Creature comforts


Office dogs might not be a new phenomenon for some (lucky) Londoners, but insiders say workplace pooches are on the rise. WeWork says the number of furry friends in its London outposts has rocketed since the pandemic.


Luxe Belgravia coworking space 25EP offers dogs a brand new bed and bowl when their owner signs up as a member, with a canine-friendly drinks trolley of water and treats during the working day, while consumer research firm Attest - voted last year’s most dog-friendly workplace - has so many office dogs at its east London office it now has luxury dog beds, dog-treat Advent calendars, an in-house ‘dogtabase’ on its intranet featuring each dog’s picture and behaviour.


Workplace wellness 2.0


Google’s original design for its 11-storey ‘landscraper’ in King’s Cross included a giant climbing wall and a bike ramp running the height of the building so employees could climb or cycle to their desks. These particular plans have now been scrapped - presumably there was little uptake for abseiling home from work - but wellness is still front and centre for the tech giant’s new London campus. The building will reportedly be home to an indoor basketball court, 25-metre swimming pool, massage rooms and 200-metre rooftop running track.


Bosses across the capital say wellness perks such as these this have been crucial to luring workers back to the office. Austen says she installed a meditation sofa and Peloton bike in Emerge’s new offices, Stakester CEO Tom Fairey offers free boxing classes to help staff destress, and insurance firm Domestic & General reportedly handed out Patch Plants as welcome-back-to-the-office gifts.


The firm says it’s invested thousands of pieces of permanent foliage around its workspace and bosses across the capital say plants have been a big factor in boosting workplace wellbeing post-pandemic.


Mindful Chef’s Wandsworth office has a “vertical farm” growing 98 kinds of edible plants from rainbow chard to curly kale, dairy company Oatly’s plant-filled Farringdon HQ was created by designers Kitt to have a “jungle” feel for boosting mental health, while co-working space Fora’s Fitzrovia outpost, Wells Mews, opened last month featuring a mindfulness room, indoor garden and built-in hydroponic towers for staff to pick their own fresh herbs to eat with lunch or take home for dinner.


Bold is better


Designers across the capital say the days of office minimalism are over - now, bosses are looking for workplaces with a bit of personality. Apple’s shiny new six-floor campus at Battersea Power Station is expected to feature lifts in the shape of an iPhone.


Facebook’s meeting rooms are reportedly named after Harry Potter characters, Game of Thrones sites and iconic London landmarks, with dramatic artwork hanging around the building.


Design agency Brinkworth recently revamped media company Defected Records’ Shoreditch office with disco balls, neon lights and an exclusive mural by artist Haris Nukem, while creative agency St Luke’s recently commissioned local artist Lee Baker to cover the walls of its Covent Garden HQ with a bold floral mural.


Let’s take this outside


A full day without leaving the building? No thanks. For London’s office architects, fresh air is hot right now - not just to reduce the spread of Covid but for wellbeing reasons.


Design studio MoreySmith says outdoor terraces are one of the most in-demand features among its clients including ASOS, Dunhill and CBRE, and Google’s new King’s Cross campus will include a landscaped roof garden with a rainwater irrigation system. Developers hope it’ll not only provide a space for Googlers to spend their downtime, but a habitat for bats and birds.


But terraces and roof gardens aren’t just for downtime. Workers at Borough coworking site The Ministry regularly take meetings on its luxury sun terrace, Oatly staff say their rooftop meeting “pod” is great for collaboration, and Woodrow staff say hosting several alfresco meetings a week on its leafy roof terrace in Old Street has boosted productivity and decision-making post-pandemic, even in winter. “I’ve noticed that people are more open to speaking their mind and contributing to the meeting,” says Tarr.


Smart spaces


Offices might be looking prettier but behind the scenes, they’re going high-tech. Bloomberg’s ultra-sustainable European HQ in the City features sensors that adjusts the natural airflow through the building according to staffing levels while The Hickman’s office space in Whitechapel even has its own app.


The building’s in-house smartphone platform, sesame, offers features including an online concierge service, contactless access control, a ‘Social Wall’ for communicating with colleagues, and news updates for seeing what’s going on in real-time near to the office.


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London office demand continues to rise says report


Research from Gerald Eve marks the highest quarter of occupier activity in the London office market since before the pandemic, on par with the pre-Covid five-year average.


Occupier take-up increased for the fourth consecutive quarter in Q4 with just under 3.2 million sq ft of leasing activity, almost 2 million sq ft of which could be attributed to activity in the City.


The real estate implications of the implementation of hybrid working policies came to the fore in recent months. Acquisitions from Google and Omnicom Group will see the consolidation of employees from multiple offices into one.


With ESG also high on occupiers’ agendas, pre-lets over 50,000 sq ft were focused on buildings which are set to achieve BREEAM Excellent or Outstanding ratings, attracting staff with more collaborative, flexible and sustainable work environments.


The resurgence of activity has brought with it the first sign of supply tightening since the pandemic began. Improved letting activity in the second half of 2021 saw overall central London availability dip from 9.4 per cent to 8.7 pr cent in Q4.


Headwinds in the construction sector remain in the near term amid ongoing complications in global supply chains for construction materials, as well as general inflationary pressures and labour shortages. Multiple schemes scheduled for completion in Q4 were delayed, increasing the pipeline for 2022 to a total of 8 million sq ft.


Investment volumes in Q4 were just over £2.5bn, a fall of 25 per cent from the previous quarter. UK investors were the most active group, with £1bn of acquisitions. Value-add product was also a feature with investors renowned for redevelopments notably active.


Both Derwent and Dorrington acquired secondary offices in core locations to reposition in the medium term, highlighting increasing appetite to take on developments.


Lloyd Davies, Partner at Gerald Eve, said: “Whilst the Omicron variant is still hampering some overseas investment activity, the government’s stance encouraging people back to their offices has underpinned improved occupier confidence and investor demand.


“We expect the divergence of performance on both leasing and investment metrics to amplify between good and poor-quality space over this year. However, where there is divergence, there is opportunity, with stock selection being key.


“Value-add refurbishments and development opportunities where there is a focus on environmental enhancement will present investors with the greatest prospects to capture yield compression and rental growth from underperforming assets.”


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Trio of Flexible Offices Operators Sign on Dotted Line as Country Grapples With Hybrid Working


Three flexible offices operators have committed to new locations this week, underlining recovering demand from companies as they look to accommodate hybrid working while they work out long-term real estate requirements.


Runway East has signed for a seventh flexible workspace location, taking a 20-year management agreement on all of Tabernacle Street in Shoreditch, CoStar News can reveal.


The group has signed with the private landlord for 22,884 square feet of offices at 52-60 Tabernacle Street. It now has five locations in London, in Soho, Borough Market, Finsbury Park, London Bridge and Shoreditch, and two in Bristol at Bristol Bridge and Temple Meads.


It says the Shoreditch space will include a "massive outdoor terrace just minutes from Old Street roundabout" and will be a "showstopper site for any ambitious business".


Douglas Green of g8 arranged the management agreement. Farebrother is the letting agent.


Separately, The Boutique Workplace Company has signed a new 10-year lease on 73 Watling Street in London. The transaction is the flexible workspace group's first leasehold transaction since the pandemic began and will see the 9,311-square-feet building reconfigured to target SMEs with a "hybrid workforce, post-COVID".


Acting on behalf of Boutique, Paul Glinsman of Glinsman Weller, said the group had been working on the acquisition prior to COVID and it is the "perfect offering for Boutique and their flexible workspace occupiers". Due to open in March 2022, the offices will have smart TVs to connect workers with a hybrid or remote workforce. Occupiers can also access 12 of The Boutique Workplace Company’s membership lounges and 40 meeting rooms at their 30-plus workplaces in London and the UK.


Dan Wheble, CEO at The Boutique Workplace Company, said the way people work has evolved "massively" in the last two years. He says more and more employees are "understanding the benefits of working for smaller, boutique companies offering flexibility, adaptability and responsiveness".


“Our model is based on quirky buildings that fit small-medium sized businesses. They have character but needed careful planning to refit and are suited to smaller companies. Watling Street has amenities such as outdoor space and smart TVs in every office, making it an innovative space post-COVID.”


Also this week, Abrdn has signed a five-year management lease agreement with flexible workspace operater Socius for 14,000 square feet of offices at The Urban Building on Albert Street in Slough.


The space covers the part ground and first floors. Socius will redesign and upgrade the existing space. Hewn was enlisted by Abrdn to provide strategic support and negotiate the agreement.


Will Kinnear, director at Hewn, says the flexible workspace market is booming, "aided by the pandemic and flexible working practices".


Cameron MacKay, senior asset manager at Abrdn, says the institutional investor is committed to working with operators on flexible workspaces to diversify its portfolio and "provide these valued spaces within the communities we operate in".


Steve Finnegan, managing director at Socius, says the flex space market is an "incredibly exciting place right now, especially where building owners and asset owners are entering this space".


The lettings come as real estate experts expect 2022 to see a plethora of new flexible offices strategies as companies are forced to grapple with their real estate needs while remaining uncertain how the extended period of working from home will ultimately change the market.


JLL picked out the flexible office market in its recent property predictions seminar saying it will have a busy year, with occupiers "mindful of uncertainties around hybrid working and sometimes unwilling to commit to longer-term space".


In November 2021, WeWork, the global flexible space provider, said its gross sales in the third quarter in London equated to a staggering 37% of all of the capital’s traditional office take-up as it posted its first figures since its public listing. It also signed a tie-up with Upflex this week.


The group said the "outsized" performance was mirrored in its major markets in the US and Europe.


Mark Stansfield, head of UK analytics, said: “Runway East’s recent letting at 52-60 Tabernacle Street is the latest in a string of deals by co-working firms in London in recent months. Nearly 400,000 square feet has been taken by co-working firms since the beginning of September, more than in the previous 18 months combined.


"Established firms like Fora, Regus and Landmark have re-entered the market, and new entrants like Infinitspace and x + why have emerged. Co-working firms are seeking to capitalise on growing demand for flexible, managed spaces as companies continue to evaluate space needs in a post-pandemic world. Half a dozen lettings have taken place in the past two months alone, with the sector rapidly re-emerging as a key office demand driver in the capital.”


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London, New York Face Similar Office Market Trends — and Recoveries


London and New York City share many similarities as hubs for the global financial sector and, it turns out, are also forging correlating paths with their office markets during COVID-19.


The United Kingdom and America’s most populous cities have had the same struggles getting workers back in the office amid remote working trends and flights to newer properties with modern designs. They also appear to be sharing a recovery trajectory that even omicron can’t derail. 


“There are clear parallels in the improving occupancy levels and public transport usage as well as flexible working arrangements being adopted in New York City and London,” said Bill Sexton, CEO of Trimont Real Estate Advisors. “Elements of working culture have been impacted forever. Versions of flexible working are expected to be retained indefinitely by many employers, which will have an impact on the market.” 


Still, even in the face of such uncertainties, New York and London remain strong office markets in terms of investment and leasing activity. 


This was evident when tech giant Google opted to make big investments in both cities with a $1 billion purchase of London’s Central Saint Giles Building in mid-January and a $2.1 billion acquisition of the St. John’s Terminal Building in Manhattan last September.


James Beckham, CBRE’s managing director of investment properties in London, noted that the city’s investment sales ticked up to around $14.9 billion last year compared to $10.1 billion in 2020. The 10-year average annual office investment for London is $18.9 billion, according to Beckham. 


“Gradually, it is stepping back up,” Beckham said. “We think this year it will get back to normal, even with some of the travel restrictions remaining in place.” 


December was the London office market’s busiest month in 2021, with 15 buildings trading for a total of $1.2 billion, bringing overall volume for the year to 91 deals totaling $10.4 billion, according to Savills. Overall London office investment activity was 68 percent ahead of 2020, with North American investors the most active followed by domestic and European buyers. Investments in London were still 20 percent below the 10-year average, though.


London saw some large lease deals in late 2021, too, including Facebook taking 312,000 square feet at 1 Triton Square in the third quarter. The city had a busy fourth quarter with leasing activity reaching 3.4 million square feet, which was nearly in line with 2019 levels, according to Savills. An additional 3.2 million square feet is under offer at the start of 2022, per the brokerage.


Total leasing volume was up 88 percent in London last year compared with 2020 and is down 12 percent from the 10-year average. Philip Pearce, head of Savills’ central London office agency, said around 40 percent of the leases are derived from tech companies clustered mainly on the eastern side of London. Professional services firms like law and accounting took up around 26 percent of leases with finance and insurance comprising around 25 percent, according to Pearce. 


“It is a pretty solid rebound from the height of the pandemic,” Pearce said. “Sectors that are considered to be heavily impacted by work from home, etc., have actually gone on to demonstrate that they’ve got a pretty healthy appetite for offices across central London.” 


The volume of available sublease space has also dropped in London, to 5.6 million from 6.4 million last February. 


Across the pond, New York’s office market gained steam in the fourth quarter of 2021, according to Savills, with leasing activity rising to its highest level since the start of the pandemic. Office demand totalled 9.3 million square feet for the final three months of 2021, up 20.8 percent from the third quarter and higher than the pre-pandemic fourth quarter average of 9 percent.


New York’s office occupancy rate increased steadily after Labor Day last year with a peak of 37 percent on Dec. 1, data from Kastle Systems show. The omicron variant spread rapidly through the city in mid-December, however, which resulted in reducing the number of workers in buildings as companies again reverted to more work-from-home strategies. 


Pearce added that like New York, life sciences companies are looking to take up space in London from a low base level. And, like in New York, it will take time for the industry to fully make a dent in the city’s office market because of the challenges in finding the right-sized buildings to accommodate certain safety requirements.  


Beckham said the overall impact of flexible working arrangements in London will likely eventually result in a 10 percent reduction in office space requirements, but stressed it will take time for the full impact on the office market to take hold since most leases are long term. He noted, though, that many developers may be reluctant to take on new office construction projects because of the unknowns in the market.


“Developers have been very cautious around spec developing new buildings because of the uncertainty around occupational criteria,” Beckham said. “In addition, we’ve seen build costs increase by 15 percent in the last 12 months so you have to be very careful about your appraisal in terms of having the right inputs. So the net result of that is hesitation in terms of spec development.” 


Average office asking rents in New York increased 1.3 percent in fourth-quarter 2021, to $76.03 per square foot, marking the first quarterly gain for this metric in eight quarters, according to Savills. Overall asking rents still remain 9.4 percent short of pre-pandemic levels and Savills projects them to modestly increase throughout 2022, as the mix of available space shifts away from sublets and toward direct space. 


London’s office rents for Class A office properties were up slightly last year from 2020 and 16 percent over the 10-year average, according to a late December 2021 report released by Savills. The average Class A rent stood at $86.80 per square foot as of late December. The rents reflect demand for such space. 


“The percentage of space that’s leased across London in what we consider to be best-in-Class A office accommodations has never been higher,” Pearce said. “It’s a clear reflection that the occupiers recognize that in order to get people back to the office, they’ve got to provide them with the best-in-class process and also buildings that have best-in-class environmental credentials because that is increasingly important in terms of the corporate agenda in London.” 


New York office landlords have also been touting the sustainability features of their properties and have been offering top-shelf amenities to attract tenants — everything from outdoor terraces to rooftop beehives to indoor golf. The same dynamic took hold in London before 2020 and only accelerated during the pandemic.


“It has forced landlords and occupiers to engage in conversations about their workplaces,” Sexton said. “Landlords and occupiers are having to think of new and different ways to make the office space more attractive to their staff, recognizing that the office space has to offer something different from the home environment.”


Sexton added that an increasing “flight to sustainability” began taking hold in London during the latter half of 2021. He said carbon emissions are starting to have “an increasing and material influence” on decisions of whether to sign office leases, which “will further pressure older, poorer quality office stock.”


While both New York and London experienced setbacks in drawing workers back to their large towers in late 2021, when omicron cases skyrocketed, analysts said the variant is not expected to have any lasting effects on the two cities’ office market recoveries. Those were well underway on both sides of the Atlantic before omicron.  


“The steady return-to-office trend witnessed in both New York City and London throughout the second half of 2021 was abruptly reversed in December with the onset of the holiday season combined with the wave of omicron COVID cases,” Sexton said. “We anticipate this to be a short-term interruption and expect occupancy levels to continue to increase as the omicron wave passes, and governments and employers encourage staff back to the workplace.” 


Commercial Observer (Andrew Coen) -

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Mindspace raises $72m in flex office drive


Investors have backed the global flex office provider as it looks to further expansion across Europe, the US and Israel.


Founded in 2014, Mindspace operates 32 locations in 17 cities across seven countries and has counted companies like Microsoft, Samsung and Expedia among its customers. Since 2020, it has opened sites in London, Philadelphia, Tel Aviv and in Yakum, north of Tel Aviv.


The company opened its third London location – in the Metro building in Hammersmith – in  July last year.


The latest fundraising round was led by Harel Insurance Investments and Financial Services, More Provident Funds, Shalom Meckenzie, Arkin Holdings, alongside existing investors.


Mindspace said that, despite the pandemic, its locations are “almost at full occupancy”. In Israel and Germany, it said, occupancy has exceeded 95% in 2021.


Like other flexible office providers, Mindspace has started making management agreements in the last two years, operating flexible workspace for landlords instead of leasing it.


The operator also entered the hybrid working market earlier this year with its Hybrid product, which allows users to rent on-demand space for one to 12 days per month. Mindspace said that “casual on-demand” contracts have tripled, year-on-year, in the last six months.


The product mirrors similar platforms by companies like Desana, which offers office space and meeting rooms by the hour.


Dan Zakai, CEO and co-founder of Mindspace, said: “We successfully faced the many challenges of Covid. Today our locations are almost at full occupancy and the current investment led by Harel Insurance and More Provident Funds is intended to fulfil the rising demand in the market and to launch new locations in partnership with landlords worldwide.”


He said that customers’ focus has been on their experience in their offices. Apps, data-driven insights and personalised activities have been central to that, which, again, mirrors what other operators and landlords are doing in their space.


PlaceTech (Karl Tomusk) -

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Citi to spend £100 million turning its Canary Wharf HQ green and flexible


US investment bank Citi has announced a blockbuster, multi-year plan to overhaul its £1 billion Canary Wharf headquarters as it adapts to new ways of working and goes green.


Citi, which employs 9,000 people in London, today announced a major refurbishment of its 42-story office tower at 25 Canada Square, which it bought for a reported £1 billion in 2019. The block is to be totally overhauled in a project set for completion by 2025. It will cost upwards of £100 million and will be one of the biggest office refurbishments in Europe.


The refurbishment is a major vote of confidence in London’s future as a global financial hub post-Brexit and in the future of the office post-pandemic. Some commentators had suggested the rise of flexible working could be the death knell for offices.


Citi’s UK boss James Bardrick said the overhaul had been in the works for a “long time” but the pandemic had influenced the bank’s planning. He said the new headquarters would be “less of a box to put desks in and more a place to collaborate and innovate.” It will feature more open plan space, a winter garden and “well-being” space, among other innovations.


“We’re seeing most of our people come back to the office now and we are able to invest in their future,” he said. Citi last week told staff to return to the office at least three days a week in line with government guidance.


City minster John Glen said the development was “another vote of confidence in the City and its role as one of the preeminent international finance hubs.” Canary Wharf CEO Shobi Khan said he was “delighted Citi is making a long-term commitment” to the area.


Citi has had a presence in London for over 100 years and Bardrick said the UK was an “excellent” base for the bank’s European operations and some of its top executives, citing Britain’s strong rule of law, talent pool and standing in the world.


A separate survey carried out by EY and published today found 87% of global financial services firms plan to establish or extend operations in the UK in 2022, the highest level of confidence since the firm began measuring sentiment after the Brexit vote.


Bardrick said Citi’s Canary Wharf refurb was a “very, very significant” investment in the bank’s future in London.


The overhaul will also make the nearly 25-year-old tower block Citi’s “greenest facility ever,” he said.


“This will be a zero carbon building,” Bardrick said. “It really helps us as a company to meet our own environmental commitments.”


Innovations include recycling hand basin and shower water for use flushing toilets, part of plans that will see the building’s energy and water use reduced by 20%.


During the refurbishment, most of Citi’s London staff will move across the road to 33 Canada Square, which the bank also occupies.



Evening Standard (Oscar Williams-Grut) -

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Workspace says customer demand robust despite Omicron impact


London-focused office-space provider Workspace Group said on Thursday customer demand has remained strong despite sector-wide concerns about the impact from the recent surge in coronavirus cases in the UK.


Office space providers including Workspace are limping back to recovery after being forced to realign their business models and strategies as tenants increasingly weigh in remote and hybrid working options or downsize spaces in the wake of COVID-19 pandemic.


Companies exposed to office properties were pegged back further when the rapid spread of the Omicron variant brought back restrictions in several parts of the world.


“We are seeing strong demand for our space, with good levels of enquiries, viewings and lettings despite the renewed work from home guidance issued by the Government in December,” Chief Executive Officer Graham Clemett said in the company’s third-quarter trading statement on Thursday.


Workspace said utilisation, which calculates the physical usage of the office spaces by the tenants, has picked up in the first two weeks of January and is now at 43% of pre-pandemic levels, compared with 55% in November.


The company, which has some 3,000 customers and owns 40 million square feet space across 60 buildings in London, said utilisation had fallen following the work-from-home guidance issued by the government last month.


Reuters - FX Empire -  (Reporting by Aby Jose Koilparambil in Bengaluru; Editing by Uttaresh.V and Sherry Jacob-Phillips) -

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It’s back to the office we go, London


Tens of thousands more commuters poured back into central London today on the first Monday since working from home guidance was ditched.


Some trains were “rammed” as the Great Return to the office picked up momentum, raising hopes that nearly two years of often dismal trade for many businesses in the city centre may soon be coming to an end.


Early figures showed around 820,000 entry and exits on the Tube by 9am, up six per cent compared with last Monday, and a 14 per cent rise from a fortnight ago, suggesting the return to the office is happening gradually rather than a sudden rush.


As Plan B restrictions were being eased, Cabinet minister Steve Barclay urged millions of Londoners including the civil service, to get the city’s economy back to running at “full speed”.


With more than 9,300 confirmed Covid infections announced on Sunday in London, public health chiefs were also urging people to remain vigilant in combating the disease, including by continuing to wear masks in crowded indoor spaces, to test regularly and to self-isolate if they get the disease.


As thousands of commuters flocked back through a hectic Victoria station, many of them were delighted to be heading back into the office.


Ellen Hart, 23, travelling to work at a property consultancy, said she was “excited” adding: “I’ve really missed the people. That may be cheesy to say but I’m a graduate and still learning from people. It’s all the little things that you overhear in the office that stick with you. You can’t get that cooped up at home.”


Jordan Williams, 25, was starting her first day of a new job as head of recruitment. She said: “The trains are rammed again this morning. I’m not worried about Covid, it’s just you would be lucky to get a seat. But I’m excited to get back to hybrid working and meeting my new workmates.”


With some workers wanting to be in the office on a Tuesday, Wednesday, Thursday, and to WFH on Monday and Fridays, the network could get busier on Tueseday.


Cabinet Office minister Mr Barclay piled pressure on union bosses and Whitehall mandarins not to delay getting civil servants back at their desks, amid reports that they may only be asked to come back in for a few days a week in some departments.


He told the Standard: “Now we are learning to live with Covid and have lifted Plan B measures, it’s time to get back to full speed in all parts of Whitehall as well as London. The civil service has played a leading role in helping the country tackle the pandemic.


“It’s important that we now see the maximum use of our office space as we build a strong recovery after the disruption of the pandemic.” However, union bosses were warning against “blanket mandates” to return to the office, urging employers to consult staff, ensure buildings are Covid secure and also allow hybrid working.


Paul Novak, deputy general secretary at the TUC, said significant numbers of people would be starting to return to the office from this week.


He told BBC Radio 4’s Today programme: “What’s really important is rather than blanket mandates or unhelpful language about ‘shirkers’ getting back to the office, employers have sensible conversations with their staff about how that return will happen, over what time scale, people’s preferred patterns of working, and crucially what can employers do to give people confidence that their workplace is Covid secure and is as safe as possible.”


He added: “Employers are legally obliged to carry out a risk assessment and consultation with their staff.” The legal requirement to wear masks on the Tube, other public transport and in shops will be dropped on Thursday, as will Covid passports in nightclubs and some other venues.


However, Mayor Sadiq Khan is keeping mask wearing as a condition of travel on Transport for London services. There were around two million journeys on the Tube on weekdays last week, around half of pre-pandemic levels and up around 10 per cent compared to the week before.


On Friday, 2.12 million Tube journeys were made, a rise of around 11 per cent in a week.


Weekday bus use was between 4.3 and 4.5 million journeys a day, about 70 per cent of pre-pandemic levels. At weekends, Tube and bus use is closer to pre-pandemic levels with the Tube reaching 1.92 million journeys on Saturday (64 percent per cent of pre-pandemic levels) and some specific times of the day close to three-quarters of the level before Covid struck.


A new report by the Centre for Cities showed central London lost 47 weeks of sales between the first lockdown and the Omicron wave hitting.


The hospitality sector was hardest hit, losing about 52 weeks of sales, with workers in central London being the most reluctant of major cities to return. Sandwich and coffee shops, restaurants, pubs, bars and other retail and entertainment outlets hope the end of Plan B will boost trade.


Evening Standard (Nicholas Cecil) -

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Google shows faith in office with $1 billion London deal


LONDON, Jan 14 (Reuters) - Tech giant Google has spent $1 billion to buy a central London building where it is currently a tenant, showing its confidence in the future of the office as a place to work, the company said on Friday.


Google, which employs 6,400 people in Britain, plans a multi-million pound refurbishment of its offices within the Central Saint Giles development it is buying, close to Covent Garden in central London.


"We have been privileged to operate in the UK for nearly 20 years, and our purchase of the Central Saint Giles development reflects our continued commitment to the country's growth and success," said Ruth Porat, CFO of Google's parent company Alphabet.


Google plans to refit the building so it is adapted for in-person teamwork and has meeting rooms for hybrid working, as well as creating more space for individuals.


The new refurbishment will also feature outdoor covered working spaces to enable work in the fresh air, the company said.


Google said it would eventually have capacity for 10,000 workers at its UK sites, including one being developed in the nearby King's Cross area of London.


"This investment in jobs from Google is a big vote of confidence in the UK as a world-leading tech hub," finance minister Rishi Sunak said in a statement.


Google said last month that it was delaying its return-to-office plan globally amid growing concerns over the Omicron variant of the coronavirus.


The Central Saint Giles building had been owned by a joint venture between Legal & General Investment Management Real Assets and Mitsubishi Estate London Limited.


Reuters (Writing by Keith Weir; Editing by Alistair Smout) -

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Office rebound will gather momentum


In fact, for Office Space in Town and many of our peers, the signs of a widespread rebound in office demand and development were clear throughout 2021, with the latest Omicron variant little more than a short-term hurdle.


There is no question that the pandemic has greatly affected workspace demand over the last two years. However, the strong appetite for the physical office during respites from lockdown provided glimpses of what was to come.


Office Space in Town’s surveys into the impact of prolonged home working in June 2020 and June 2021 found persistent negative effects in both worker physical and mental health.


With 64% of firms not offering practical guidance on office health and safety (2020), home offices fell short of standards found in the traditional office. Consequently, the British Council for Offices found a significant increase in musculoskeletal complaints.


Mental health suffered too, with 29% of respondents to our survey citing loneliness as the biggest downside to home working and 25% reporting feelings of anxiety while working from home in 2020.


This persisted into 2021, with 39% of respondents reporting inability to unplug from work as a key disadvantage of home working and 51% reporting that their mental health had been negatively affected in some way.


Further, aside from the swathes of workers who returned to the office 2021, there were indications of a more sustainable return, with our 2021 research showing double the number of people working in their normal office location as there were during the first lockdown.


Companies appeared to embrace this, with only 4% of respondents reporting that their firm had permanently given up its space.


As a leading provider of serviced workspace in London, we have seen consistent growth over the last two years – namely a 518% increase in London viewings from May 2020 to May 2021 and a 2,200% increase in closed deals in London in May 2021 from this month in 2020.


It is therefore unsurprising that Deloitte’s survey found a surge of new office starts in the five months to September 2021. Workers will never leave the office for good.


Property Week (Giles Fuchs, Chief Executive, Office Space in Town) -

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Brock House: The Office Group's latest London flexible workspace


The building has a colourful history; originally the site of a church, Brock House was built as the Philharmonic Hall playing host to jazz orchestras in the early 1900s. By the 1930s, it was reopened as a grand cinema, and later became an automotive showroom, all of which have influenced the design concept created in collaboration with renowned architects, SODA Studio.


Spanning 27,818 sq ft across eight floors, The Office Group (TOG) development is situated on Great Portland Street, close to Oxford Circus. The ground floor is surrounded by floor to ceiling showroom style windows, while luxurious curtains help to transform open spaces from communal, collaborative workspaces to intimate meeting spaces if preferred. 


Each TOG workspace is distinctive by design, embracing its cultural heritage to give every building its own unique character. With materials and fixtures inspired by the golden age of car design and moviegoing, hints of chrome run throughout the space alluding to the Brock House of the 1930s.


A striking reception desk clad in Rosso Alicante marble occupies the lounge, topped with brushed metal. This is continued in the knurled metalwork that features throughout, from the stair balustrades to the handles of the cupboards and doors.


A palette of warm tones was used to decorate the interiors, with a rich burgundy punctuating the corridors, creating a sense of rhythm between the rooms. SODA Studio also developed bespoke graphics and signage for the spacious shared areas, such as kitchens, the fully-equipped meeting rooms and onsite members gym.


References to the art deco cinema history begin with the building’s core; wrapped in a perpetual pleated curtain, which then reveals a lighter terrazzo lined lobby within. Warm tones were used to decorate the interior, with burgundy punctuating the corridors creating a sense of rhythm between the rooms. SODA Studio also developed bespoke graphics and signage for the spacious shared areas, such as kitchens, the fully-equipped meetings rooms and onsite members gym.


A mansard roof extension spans the top level, providing additional amenity spaces and dramatic views across the capital. This level welcomes an abundance of natural light that streams through wraparound windows that can be opened up to create a space akin to an internal terrace.


TOG and SODA’s innovative design approach to Brock House also reflects the evolving needs of the workforce: meeting rooms are fitted with video conferencing capabilities, while private, soundproofed phone and focus booths are designed for better acoustics. TOG has added further private and semi-private spaces for calls and focused work. The property has also been fitted with an advanced air handling system in response to the Covid-19 pandemic. 


"This richly detailed building brought with it a wonderful history of different uses to inspire a series of contemporary workspaces and communal areas. We wanted to create a space that stands its own ground in relation to its notable BBC neighbour. The result is a delicately balanced interior that reflects the high-end surroundings of the West End." Russell Potter, Director at SODA Studio 

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London office market reports on signs of improvement in 2021, with rise in lettings and spend


London’s office market, hit hard by working from home guidance during the pandemic, has seen encouraging signs of a bounce-back in 2021, new reports suggest.


Planning approvals, investor spend and office lettings all jumped this year compared with 2020, as businesses remained committed to maintaining space in London.


Colliers estimates that central London office take-up this year will reach 9.5 million square feet, up 55.7% on 2020 but still down on 2019 when 11.83 million square feet was taken.


Guy Grantham, director of research and forecasting at Colliers, said: “Expansionary demand, especially centred on prime, new grade A accommodation, is a major part of improved transaction figures, rather than mere churn.”


Property agent JLL said almost £12 billion of central London offices have traded so far this year, and investor spend could reach £13.7 billion by December 31.


That would be above the total of the last two years, but below the 10-year average of £15 billion.


Julian Sandbach, head of central London office markets at JLL, said: “Increasingly we are seeing investors and developers wishing to acquire or create the highest quality, most sustainable and amenity rich assets, recognising that businesses will want to locate in offices which both inspire, retain, attract and above all provide high well-being to their employees.”


He added: “Investors are now considering strategies for, 2022 and based on ongoing levels of activity we expect Q1 2022 to be a busy quarter across central London with continuing high levels of liquidity and yields remaining firm.”


Although working from guidance is back in place, and some companies are looking to reduce office space, a number of developers are betting on continued demand for modern and high quality office HQs, even if staff only use it for part of the week. Numerous employers have embraced flexible working during the pandemic.


The City of London Corporation said the amount of Square Mile office floorspace that got the green light for development in 2021 surged year on year.


Evening Standard (Joanna Bourke) -

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Death of the office has been greatly exaggerated


As Covid restrictions continue, especially the advice to work from home, many fear that chats at the water cooler and exchanging ideas in the canteen are a thing of the past. Employers have had to be creative to try to keep their company’s core values and culture alive, in some cases by trying to turn all the usual office activities into virtual events in an effort to ensure all staff can take part, be they in the office or working from their kitchen tables.


Among these companies using online activities is Deloitte, the global services network with offices in Dublin, Limerick, Cork and Galway. Sinead Gogan, its chief human resources officer, said: “We’ve put together this app where you can put in your Eircode and find out who lives near you. Obviously people do this voluntarily, but it means they can connect, and maybe go to their local park or for a coffee.”


Ger McDonough, a partner at PwC, said the company had set up “coffee roulette”, a system that randomly matches employees across the organisation for virtual coffee meetings. “We’re trying to recreate some of those serendipitous moments, because if your week is very structured, you’re missing some of that spark, some of that creativity,” McDonough said. “So it’s trying to be inclusive and connected. Leveraging technology is really important.”


Twitter’s Dublin office on Fenian Street has turned all its programmes into virtual events. Anne Kiely, its HR director for Europe, the Middle East and Africa, said: “A good example is our global #OneTeam all-hands meetings, which pivoted from being broadcast from San Francisco to becoming completely virtual, with presenters from all over the world and an accompanying Slack [communication platform] channel where employees can ask questions. We found this to be more engaging for employees than it being in-person.”


Declan Black, managing partner at Mason Hayes & Curran, a law firm in south Dublin, said: “There are some meetings when face-to-face contact is difficult to beat, where particularly sensitive issues are discussed, or where you’re looking to build a relationship or make assessments of people. I don’t think you can do everything through a screen.”


Bernard Harbor, a spokesman for the public service trade union Forsa, said that for some staff remote working had led to a feeling of detachment and a fear of missing out or not being able to stay up to speed with new developments in their organisations. “They’re not seeing their colleagues and their friends and sometimes people feel they may be out of the loop,” Harbor said.


“People may want to maintain a connection with colleagues, and with what’s going on at work — things that are picked up as a matter of course because you’re chatting to your boss, or to colleagues in the workplace. I think that is a big issue.”


Shane Timmons, a research officer with the behavioural research unit at the Economic and Social Research Institute (ESRI), said studies looking at the effects of remote working on collaboration have found that synchronous or real-time communication has declined. “You get an increase in asynchronous [intermittent] communications such as emails being sent one day and replies taking another few days,” Timmons said.


“People find it harder to convey and to converge on the meaning of complex information when communication is done asynchronously. Even if it’s done through instant messaging rather than face to face, it’s hard to convey complex information and you are less likely to come away from the discussion with the same understanding of that information.”


Audrey O’Mahony, head of talent and organisation at the consultancy Accenture, said that early evidence suggests elements of remote working have led to an increase in mental health problems. “We are also seeing worrying trends in how remote working is adversely affecting the D&I [diversity and inclusion] agenda — namely for women, who continue to shoulder a greater burden of care and have thus become less ‘seen’,” O’Mahony said.


“When it comes to redesigning the future of work in a hybrid setting, leaders need to be mindful of three things: employee experience; organisation and workplace readiness; and leadership practices that are inclusive. We now have a once-in-a-generation opportunity to completely reimagine and rebuild the future of the workplace.”


At the end of the summer some companies announced they were adopting a flexible working model of 3:2 (three days in the office) or 2:3 (two days in the office). LinkedIn, which has a Dublin office at Wilton Plaza, said its long-term policy was to offer both remote and hybrid options.


Sharon McCooey, head of LinkedIn Ireland, said: “Right now, everyone is deciding on a team-by-team basis what works for them, and we think it will take a few months for people to individually decide whether remote or hybrid is the best option for them. That said, 87 per cent of our team told us they’d like to be in the office sometimes, so we’re continuing to invest in our Dublin workplaces.”


Declan O’Reilly, director of the office agency at the property firm Knight Frank, said some companies had rented out their offices in the pandemic, but few were selling them. “The narrative of a year ago — that we’ll never work in an office again — has stopped and I think people are starting to see and appreciate the value of having staff in an office.”


The Times (Julieanne Corr) -

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The key takeaways from Property Week’s hybrid WorkSpace Conference


The hybrid event, which took place online and at America Square Conference Centre, London, featured a stellar line-up of industry leaders and experts. Here are some key takeaways from the event.


Investor appetite


Helen Causer, office and investment lead at Argent (King’s Cross), said that investment demand was geared around grade-A space.


“It’s clear that across central London there is a really strong flight to quality,” she said. “The underlying quality of the real estate will become increasingly important.


“Another key theme is that all the audiences we are talking to – investors, occupiers, developers – want the same thing: a strong and credible ESG story, and I think that will become even more pronounced.”


Hub-and-spoke model


Leading figures from the flexible workspace industry debated the future of hub-and-spoke as one potential alternative to the traditional office model in the wake of Covid.


Richard Morris, UK chief executive of IWG, noted: “We have locations in zones three to six and also all around the home counties and beyond, where demand of our network is up 50% to 100% compared with before March 2020,” he said. “We think that’s something that will continue and persist.”


However, Charlie Green, co-founder and co-chief executive of TOG, pointed out that the regional shift was not likely to benefit every provider in the same way.


“On the hub-and-spoke issue, I think Richard [Morris] is in a unique position to push that argument because he has a portfolio in those regional locations,” he remarked.


“We’ve done our homework as a business and looked into those same locations. We looked at whether we lease or buy office buildings, and often the difficulty is that we cannot make the economics work for us. The entry pricing is too great for us.


“Then we have to think about the demand side. There is a very real need for people to work near home but, actually, will that endure?”


Occupier plans


From a landlord’s perspective, Paul Williams, chief executive of Derwent London, was optimistic about future occupancy levels.


“We have completed three comprehensive surveys with our top 50 tenants in the last 18 months,” he said. “Universally, all our occupiers are saying they expect more agile working in the future. However, they also say they want to get back to their offices.”


Kate Richardson, head of national office programme at the NHS, said that while many staff were keen to return to the office, occupiers such as the NHS were looking to slash their office footprint in light of reduced overall demand.


“We have about 3,000 offices across England, spanning 320,000 sq m,” she said. “It was much larger, but we’ve reduced it significantly from 400,000 sq m and we are reducing it all the time.”


Benefits of inclusion


Discussing how to create a more inclusive office space, Kate Smith, head of workplace and portfolio strategy at CBRE, posed an important question: “What do we mean by inclusive design and why is it important?”


Her answer was simple: “Anything you can do for a workplace that makes the huge investment in your talent greater will provide a better return on that investment.”


Smith argued that incorporating inclusive design principles not only benefited specific groups but could also lead to wider benefits for those in the workplace. “Once you are looking at how to create something for a particular group, you often produce superior outcomes for everyone,” she said.


“One example is smooth pathways. That’s great for people using wheelchairs, but it’s also great for people who use zimmer frames, those with luggage or pushchairs and even those with high heels.”


Smith ended by issuing a rallying cry to the industry. “This is the perfect time to change,” she said. “You’re disrupting the way you deliver, so let’s build this in and do better.”


Property Week (Sebastian McCarthy) -

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The pandemic has shown being able to adjust is vital, says MR MONEY MAKER, so flexible office space firms could be a good investment


The joy of hindsight – if only we had known! Well none of us knew the pandemic was coming but we have now all learnt to live with it – for good or ill. 


This virus, in whatever form, is going to be with us for an indefinite period. There's a lesson in investment and finance from this. 


For me, the core learning point is flexibility and being able to adjust and change, and to do so often at very short notice. 


Key cost areas 


For most companies, their most expensive costs are usually their payroll. 


However, this time around we saw some greatly imaginative efforts from both companies and governments. After all how many of us had heard of furlough before, or even becoming a T*** – working in the office on Tuesdays, Wednesdays And Thursdays. 


However, the other prime cost, and often the most rigid, is office and work space. As a result of the change in our shopping habits as brought on by the pandemic, warehousing space has been in high demand. 


Equally, though, firms have had to look at their office space where cleverly worded leases lock them in for rigid periods and usually with the ridiculous demand of built-in rent rises. I am pleased to see that this is now coming under greater examination.


So what can we do? 


Flexible office space is often the answer and the growth of this over the past decade had been most impressive. 


However, what was useful flexibility for new start companies and new departmental units suddenly became mainstream as firms examined the new work regimes being brought forward out of necessity. 


One of the leaders here has been IWG, which owned Regus, probably the brand leader in the UK. 


They now think their occupancy is at 70 per cent of where they were pre-pandemic. The company has spread into other areas such as digital and technology businesses, and may well be looking to spin off non-core assets and concentrate on the flexible office market. 


Remember, this market can be very variable, from quite smart private offices through to open spaces full of enthusiastic Gen Xers at desk points and not too far away from table football and table tennis.


Why this sector is good 


The share price peaked in January 2020 at £4.69 and despite being apparently perfectly positioned for such flexibility with costs, the price is now down to around £2.76. 


Although it has been affected by demand, I can see rising demand next year as the entrepreneurial spirits start to stir again. 


I like this sector rather than direct property as I can see where the demand can come from. Of course, another lockdown or some other catastrophe could put a nasty hole in the business, but at this value I think they are attractive. 


A single stock is risky, so a property fund would give you a wider coverage, and would include property outside this specific niche. In which case the iShares UK Property UCITS ETF is a low-cost access to the market. (Jason Urquhart) -

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Limited supply, high demand delivers bright future for London office market


Mass construction leaves NYC office landlords in a less promising position.


The rise in remote work due to the COVID-19 pandemic might have indicated office buildings would eventually become obsolete. Investors don’t appear to be too concerned, however, mainly due to construction, or lack of it depending on the city, The Wall Street Journal reports.


For example, the London commercial real estate office market looks to be especially promising because not too many new offices were built there recently. The lack of new construction should help CRE landlords in London bounce back quickly from the pandemic. Real estate investment trusts British Land, Great Portland Estates and Landsec both own office portfolios in London said their lease signings have increased during the prior three months through September. Additionally, the firms noted that their portfolios increased between 1.6% and 2.8% over six months.


Overall, office leasing in London was about 12% below average quarterly levels during the third quarter, according to real estate broker Knight Frank, The Wall Street Journal reports. However, tenants that were initially hesitant to add space while their employees worked from home are now beginning to sign new leases. Facebook recently signed of the biggest deals during that time as it took space in London’s West End.


Due to limited building supply, London landlords won’t have much trouble leasing space. CRE owners with more modern, energy efficient buildings that are in central locations will have the easiest time attracting tenants, however. Approximately 60% of London leases signed since the pandemic started have been for new or recently renovated office buildings, according to Knight Frank. Less than 4 and 10 were as successful prior to pandemic.


London’s current overall vacancy rate is 9.1%, per British Land, but it’s only 3.5% for newer, “prime” buildings. The top-notch office buildings only comprise 10% to 20% of London’s total portfolio and the city’s high-profile landlords own a majority of them, along with older buildings that can be renovated.


Prime building CRE owners can expect a lot of interest from tenants due to there being a limited supply. Construction slowed in 2016 because developers wanted to see how the U.K.’s “Brexit” vote would impact the city, according to The Wall Street Journal. The result of the construction slowdown is only 8 million square feet of new offices will be built between now and 2025. It’s projected that 4.7 million square feet will be leased annually.


Oversaturation hurts New York City office market


Meanwhile, New York has prime real estate like London, but unfortunately, too much of it. Office building construction has held steady in the Big Apple—25 million square feet of new office construction or major renovations are expected to occur in the Manhattan market, according to Franklin Wallach, a director at real estate firm Colliers.


The issue isn’t a lack of tenant interest. Manhattan-based corporate clients want to lease space in the more modern and sustainable offices. Landlords just can’t capitalize on the demand because there’s so much supply. Almost 17% of Manhattan prewar office space was available to rent. More than 18% of office buildings built since 2015 is available, according to Colliers data.


Majority of London CRE office owners need to update their buildings


London’s office building market looks promising for now, but the optimistic outlook could quickly sour if CRE owners don’t get their properties to meet upcoming government sustainability regulations, Bisnow reports. Currently just 4% of London offices have an Energy Performance Certificate that meets the energy use regulations that will go into effect in the United Kingdom in 2030. The requirements are part of the reason building owners have pushed to make their properties more eco-friendly—it’s not just about making them more appealing to tenants.


This isn’t some technical requirement — it gets to the heart of an existential overhaul currently ongoing in the London office market, precipitated by the need to radically cut the carbon society produces.


“On most property-related stats, like rental levels or vacancy rates, if you asked me to guess, I’d normally get within about 10%,” Patrizia Head of Transactions for the UK and Ireland Phil Irons told Bisnow. “When I was asked what percentage of London office stock would currently be obsolete by 2030, I said about 30 to 40%. When you find out that figure is 96% you just go, my God.”


Being forced to upgrade their buildings has led current CRE owners and buyers to ask how much they’re willing to pay for office space. Creating a “greener” office has financial benefits, but CRE owners have to weigh those benefits against the possibility of people not returning to the office post-COVID.


London’s energy use regulations explained


The UK’s current building rating system is called an EPC, which grades a property’s energy efficiency from “A” to “G” with “A” being the best, Bisnow reports. The new Minimum Energy Efficiency Standard legislation requires that all commercial buildings have an EPC by 2025. Buildings that don’t have at least a “C” rating by 2027 will be prohibited by law from being leased. A “B” grade will be required by 2030.


Right now, only 4% of London buildings that have an EPC had a “B” rating or better. Just 22% had a “C” or “E” rating, while 32% received a “D.” The remaining 21% had an “F” or “G” rating, meaning it’s illegal to lease them now. JLL’s analysis revealed that 90% of U.K. office buildings will need to be upgraded in order to meet government requirements as well as tenants’ and institutional investors’ demands.


The cost of a building upgrade


Investors are already thinking about office buildings due to the uncertainty that the COVID-19 pandemic caused, as well as how much upgrading offices will cost, Irons told Bisnow. The concern about upgrade costs stems from the price tag already exceeding other assets classes. A basic upgrade to make a building ESG compliant could cost approximately 100 pounds ($132.69 USD) per square foot, according to Irons. A more significant upgrade could cost more than 150 pounds ($199.03 USD) per square foot. At that rate, a 100,000 square foot building would cost almost $20 million (USD) to upgrade.


“The question is, do secondary offices go the way of secondary shopping centers?” Irons told Bisnow. “We’ve had painful experience of the value destruction that has happened in secondary shopping centers, where the decline from the peak is 80%. If you’d asked people that owned those centers five years, would they see an 80% drop, they’d have said no.”


CRE owners appear to have no choice but to upgrade


It’s not just government regulations forcing CRE owners’ hand to make their buildings more sustainable. Tenant demand is pushing the issue, too. While making these upgrades might be expensive and time consuming, they have a good chance to pay off in the long run. According to JLL data from 2019, London’s most sustainable office buildings have a rental premium between 6% and 11%. That premium is likely to increase as ESG becomes more of a priority for tenants as the pandemic subsides.


While the premium increase applies to the best new buildings, current buildings should also see a rental boost once they are upgraded and made more sustainable. If successful, real estate professionals and investors might see carbon emissions in a new light and prevent secondary offices’ from becoming obsolete. These current buildings have to be well built to begin with in order to survive, however.


“The greenest buildings are going to be the ones where you can reuse the embodied carbon (carbon emitted during a building’s construction and demolition),” Cushman Chairman for the UK and Ireland Digby Flower told Bisnow. “Embodied carbon could be the saving grace of secondary offices.”


In the past, when investors and tenants examined a building’s carbon footprint, they looked at emissions during its operation. Today, they’re also paying attention to what emissions are being created during construction. Renovating an existing building creates less emissions than building a new one since less steel and cement need to be created.


“People will take good buildings from the ’80s and early ’90s, buildings that have good bones, that can incorporate modern amenities and sustainable technology, and refurbish them,” Flower told Bisnow. “Those are going to be the most sustainable buildings, because they reuse the existing concrete, cement and steel. They are going to be the winners.”


Office buildings that aren’t in as good of shape might not be as fortunate, however. It’s hard to convert them into other uses and they’d be subject to the same environmental regulations anyway. If a property can’t be made into a sustainable office building, it’s unlikely it can be transformed into any type of sustainable building, according to JLL Head of UK Offices Research Elaine Rossall.


“There will still be a need to provide energy-efficient homes as well as offices, and there is the added cost of conversion to residential,” Rossall said.


Rossall also noted that the efforts to make office buildings more sustainable might be easier if it became more cost effective for smaller companies who happen to own a lot of the city’s office buildings but lack the capital to make the required improvements.


“The government need to think about ways it can bring smaller investors along,” she told Bisnow. “There needs to be a carrot as well as a stick, which might be making green finance available to smaller owners. The policy needs to be thought out to bring everyone on the journey.”


Connected Real Estate Magazine (Joe Dyton) -



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Deloitte says London office developments are booming despite hybrid working. Here’s why


Is a back-to-the-office counter-revolution under way?


Deloitte’s latest London office “Crane” survey is published today, and it appears to show that the workplace tsarists are fighting back against the work-from-home boom – and quite successfully, too.


It puts the volume of new office starts between April and September 2021 at 3.4 million sq ft, which is an impressive-looking number by itself but even more so when you compare it to the long-term average of 2.4 million.


The average new-build’s size has also risen, by a chunky 28 per cent. So has the proportion of new developments as opposed to refurbishments. They accounted for 46 per cent of the total, up from 33 per cent in the winter 2020 edition.


Could it be a reaction to managers hauling staff in, with the refuseniks risking the chilly Siberian exile where careers go to die?


Well, not exactly. There are a variety of factors working in favour of developers and commercial property investors, which have combined to make for a much cheerier outlook for the commercial property sector.


First up is the way in which hybrid working is operating in practice.


Say you’re a relatively large employer and you are now having most of your employees in for three-fifths of every week. That still doesn’t mean you can get by on just three-fifths of the space you were using prior to the pandemic.


If the decision on which days to come in to the office is left to the employee, by far the most popular days will inevitably be Tuesday to Thursday. Getting rid of the Friday evening commute offers a handy extension to the weekend, while working from home on a Monday eases the shock of the morning slog into work at the beginning of the week.


On those three midweek days, an employer may very well find their office at something close to its pre-pandemic capacity, while on Fridays it may not be much busier than it is on a Saturday.


Even if the employer tries to manage this, some days will still generate more demand for space. Midweek days are likely to be favoured for client meetings, for example, especially if the client has adopted the three-in-five model for its own staff.


Seasonality may play a role, too. Busy times of year may require more time in the office and thus more space.


Another driver working in favour of developers is a desire among employers to offer better premises to encourage staff back, and also to encourage talented new people to join. The fancy campuses of the tech giants, which have offices in or around London, have had an impact on other businesses. They find themselves under pressure to emulate them.


Covid, and the desire for safer workplaces, has also driven a desire to upgrade. Moves put on hold during lockdown are now being made. Lease events are leading to action.


So the office is proving more resilient than might have been expected, even in the absence of a counter-revolution, and this is reflected in the views of developers. They are much more sanguine about the impact of homeworking on demand than they were at the onset of the pandemic in 2020.


More than a third (37 per cent) now expect homeworking to have no impact at all. That figure stood at 12 per cent a year ago. Nine in ten also feel more optimistic than they did 12 months ago.


On balance, more flexible, hybrid working remains a very welcome development. It is particularly helpful for women and disabled workers, both of whom have suffered from discrimination in the past.


But even if developers have grounds to feel more chipper about it than they did, there will still be victims of the work-from-home trend.


We should spare a thought for the businesses that exist to support offices. Cafes, sandwich bars, pubs and retailers will all still lose out on footfall as a result of the three-out-of-five model, even if the demand for office space hasn’t declined as much as was predicted.


The Independent (James Moore) -

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Land Securities predicts London office space shift as returns to profit


Land Securities (LAND.L), whose $15 billion property portfolio is largely made up of central London offices, expects growing demand for more spacious spaces that allow for greater physical distancing to boost rental prices.


Britain's top commercial property landlord said on Tuesday it was seeing higher demand for work spaces with more room, often for multiple floors within a building, as it reported a return to profit for the half-year thanks to rent levels in London recovering from their COVID-19 pandemic lows.


Landlords face a bumpy road to recovery as many workers have not returned to offices from home working, but the lower footfall need not affect the amount of space that tenants commit to, Chief Executive Mark Allan told reporters on a call.


"(Tenants) are really interested in having access to more flexible space on top of their core letting to enable them to expand and scale back depending on whether they have got a particular project ongoing, or the conference space or meeting space," Allan said.


Large tenants were also showing interest in occupying multiple floors within a single property, Allan added.


FTSE 100-listed (.FTSE) Land Securities, which is itself based in London, said it expected demand to remain "resilient" for the rest of the year.


EPRA (European Public Real Estate Association) net tangible assets, a measure of the value of its buildings, had risen 2.7% to 1,012 pence per share in the half-year to September, the company added in a statement.


Shares in Land Securities were up 5% to 745.8 pence at 1125 GMT, having hit a more than six-month high.


Land Securities, which had announced a four-pronged growth strategy last year including diversification into mixed-use properties, said profit before tax was 275 million pounds ($370 million) in the six months ended Sept. 30, compared with a loss of 835 million pounds a year earlier.


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Snapchat owner to more than double London HQ size in new office deal


The US owner of photo messaging app Snapchat has signed a deal that will more than double its office footprint in London, in a big boost for the capital’s property market.


It is understood New York-listed Snap Inc, led by Evan Spiegel, has agreed to take close to 115,000 square feet in a pre-let at a soon to be completed building called Bloom.


The Clerkenwell development features offices, terraces, a fitness studio and more than 200 bike spaces. A website for the building says the office leasing agents are CBRE and Compton and the site is next to Farringdon station.


Landlord HB Reavis and Snap declined to comment on the deal.


The latter is understood to have a team of around 400 in the capital, but the size of the space Snap is taking could be used to house some 1500 people potentially in the future.


It marks a substantial expansion in London for the camera company, which operates from two smaller sites in Soho.


Snap has this year celebrated its 10 year anniversary and in the third quarter saw sales surge 57% to $1.1 billion.


Talks for the letting were reported by property news site EG in June, but the deal has only just been inked according to sources.


Snap joins a list of businesses taking new offices, even as employers embrace hybrid working.


A number of companies are expected to reduce office space they occupy, but property developers are reporting good demand for modern and environmentally-friendly buildings.


Earlier this year TikTok, the popular short video app business, signed for office space that sits above the Farringdon East Crossrail Station.


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Confidence to develop new London offices bounces back


The volume of new starts on London office construction sites and appetite for speculative development has risen, despite the popularity of working from home, new research suggests.


According to Deloitte’s London office crane survey, new starts increased by 10% from the previous study in May, to 3.4 million square feet between April and September.


That is well above the long-term average of 2.4 million square feet.


In the six months to September the total volume under construction dropped to 13 million square feet, although that was still above the long-term average of 10.7 million square feet.


The report added that the average scheme size has risen by 28%, “demonstrating a greater appetite to take on risk on individual schemes”.


Commitment to invest in projects in the capital comes despite the occupier market undergoing significant change since the onset of the pandemic.


After experiencing how well some staff adapted to working from home, there are certain companies looking to reduce office sizes. In addition, numerous bosses expect to have fewer people in headquarters at one time, as they embrace a mix of home and office hours.


However, a number of developers have reported high demand for new and environmentally-friendly buildings, as businesses look to offer employees attractive places to work in when they are in town.


More than a third of respondents (37%) now expect home working to have no impact on leasing demand, three times the proportion (12%) compared to a year earlier.


Mike Cracknell, director in real estate at Deloitte, said: “The survey shows a rise in pre-lets of new construction starts with 19% observed this time, up from 10%.  Alongside this, there have been high levels of speculative development.”


He added: “This is reflecting developers’ ability to ‘look through’ the short-term effects of the pandemic to a future where occupancy and demand will rebound, even if working patterns and office configurations also change.”


Deloitte’s research looked at data over the half year to September and included a survey of the capital’s biggest developers.


Evening Standard (Joanna Bourke) -

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British Land reports busiest period for office deals in a decade, as value of property portfolio rises


British Land has returned to property portfolio growth and profitability, the FTSE 100 landlord said as its boss reported the busiest office leasing period in a decade.


Simon Carter gave the update alongside announcing a major office pre-let to law firm Allen & Overy. The landlord also said it will commit to developing 580,000 square feet of workspace, shops and homes across three new buildings in Canada Water, where work has begun.


Carter said the firm’s office campus division had a strong half year to September 30, with lettings to companies including Facebook and property agent JLL.


Carter said that while occupiers are not necessarily upsizing, as they adapt to flexible working, many are hunting for modern and environmentally-friendly offices. He added: “We are seeing demand focused on the absolute best space.”


Total lettings and renewals totalled 819,000 square feet. The boss told the Evening Standard it was the busiest leasing six month period for the office campuses business in 10 years.


The value of the campuses division gained 3% in the six month period, but retail parks registered the highest growth, up 7.1%.


British Land’s total estate value was £9.8 billion as at the period end, up from £9.1 billion in March 2021.


It recorded a pre-tax profit of £370 million from a £730 million loss last year when income was hurt by lockdowns as many retail tenants had to temporarily close stores.


Since the period ended, British Land has pre-let a further 254,000 square feet to Allen & Overy at its Broadgate site in the City.


The tenant will be relocating from a larger London office, with a plan to move more than 1,800 people in phases during the winter of 2026-27.


A&O managing partner Gareth Price said: “The new office space is a step-change in terms of energy consumption and better reflects the way we want the firm to work in the future.”


British Land’s Carter said the energy efficiency at the building being created is six times better than the existing site there.


Evening Standard (Joanna Bourke) -

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Offices still have a role to play but must adapt to new needs


Flexible working has not killed the office; it died in the 1990s. Back then, when you left the office on a Friday, no one could contact you until you were back in the office on a Monday. You were either at work in the office or at home.


Then mobile phones arrived, followed by email, laptops and wifi. Work infiltrated home life, and life infiltrated work. But the office has been slow to adapt even though working now is fundamentally different to the 1990s.


Change will have to happen. There is a work evolution under way unlike anything the office market has experienced before. Yes, we have seen some wacky features such as slides and we have seen the introduction of hot-desking, breakout areas and co-working, but this is different.


The office market needs to embrace the fact that it is not the only available place to work. There was a time when producing the same bland space was not an issue because businesses and staff did not have a choice. But now they do.


Offices still have a role to play – it is not ‘RIP offices’ – but the lid is off Pandora’s box and it is not going back on. People do not need to work in awful offices; they can vote with their feet. Offices are part of a much more competitive landscape of different places for working.


Office design


Offices need to be the sort of space people want – as opposed to need – to spend time in, which means designing them with an understanding of how people work now. It is not about fads and tick-box exercises.


Putting up a wall of filing cabinets and throwing down some bean bags to create a breakout area is not going to cut it. Neither is having a flashy breakout area but cramped rows of desks.


Desk density cannot be used to compensate for not being able to monetise breakout areas. How many people would choose to work in a densely packed office when there are alternatives?


Covid has shown the importance of connectivity and community, and workplaces need communal spaces where ad hoc conversations can flourish. But forced community building is like forced fun – it rarely works.


Collaborative space has become a trend, but it is also a mistake to think that creating swathes of collaborative spaces is the answer. Having space for staff to retreat for quiet work or to make a call without feeling everyone is listening is equally important.


It is why phone booths within the workplace are increasingly in demand, more so now that video calls are part of everyday working.


Successful workspaces are where everyone feels included but equally where people do not feel pressured to be included and can find different spaces to use – or retreat to.


Businesses and employees have different needs. For example, a team of coders who spend most of their day in front of a screen require something different from a workplace than a team of solicitors who spend chunks of time working on business development.


Offices need to offer space that supports modern work needs and be workplaces where people choose to be.


The structure of the property market is such that change takes time, and there may be some short-term pain while spaces are adapted to compete in the new marketplace. But with a better understanding of how people now work and providing space to suit those needs, offices will thrive as workplaces.


Will Kinnear is founder of HEWN


Property Week (Will Kinnear) -

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