REALITY check
FORE Partnership is a classic example of how successful and influential private investors are in the commercial property market.
It has completed development of the 4,459 sq.metres (48,000 sq.ft.) VIEW 58 on the Victoria Embankment which has been sold to the charity Nesta, for its own occupation. FORE undertook the scheme in a joint venture with Kier Property.
FORE included a number of new ideas in the building that apparently have not been used previously in the UK, such as solar photovoltaic panels that develop power from both the top and underside of the panels.
Basil Demeroutis of FORE said: “View 58 has been a hugely successful development for us and endorsed our responsible real estate philosophy, which focuses on low carbon strategies, social impact, place making and design, which we believe enhances rental income and improves returns”.
FORE is part of an international trend since it is a pan European office for family offices and private investors, reflecting the increasing global spread of wealth.
Another new arrival to the London property scene is Lowndes Estate, part of the Noble Organisation, a privately owned leisure operator which has set out to create a UK property portfolio.
In its first deal it has paid the Colville Estate £5.74 million for the 785 sq.metres (8,446 sq.ft.) 9-13 Cursitor Street in Midtown.
Lowndes’ Edward Flach commented: “Given the high occupancy costs in the West End, Midtown is becoming increasingly attractive to occupiers and is therefore an ideal location for us to launch our investment strategy”.
5 Commercial Property Register February - May 2017 www.compropregister.com NEWS As the reality of complicated negotiations over Brexit become more pervasive, so the outlook for commercial property becomes cloudier.
There are a host of conflicting pressures and sentiments fuelling this uncertainty even though last year’s take up was in line with the historical average at 929,000 sq.metres (10 million sq.ft.) after a surge in the fourth quarter with take up in east London up 8% on the average.
Neil Prime of JLL said: “The recent surge of City deals is encouraging for central London. It demonstrates that demand has been more resilient than many feared”.
Another figure points in a different direction with Deloitte’s Central London Crane Survey reporting a 42% decline in office construction starts in the sixmonths to November.
Deloitte’s Chris Lewis commented: “There is a reaction to political and economic instability but businesses are also thinking about their future needs. We are likely to see lower rents and more incentives”.
Added to this, Standard Life has sold properties worth over £350 million since the Brexit vote in order to rebalance its portfolio away from the capital. Anne Breen of Standard Life said: “While we believe there is long term growth in London we are also conscious of the need to ensure our funds are not overweight in the market near term”.
In fact, the situation is complicated because another indicator of confidence is the decision to build a 130,060 sq.metres (1.4 million sq.ft.) skyscraper at 22 Bishopsgate in the heart of the insurance district, a financial sector which is expanding strongly and has taken more space in the City.
A further encouraging factor is the resilience and confidence of small and medium sized businesses.
A report from Albion Ventures for the UK showed that 73% of small businesses with over five employees plan to grow over the next two years and only 5% expect to shrink their activities, London was in third place after the East Midlands and the east of England.
Backing up this view serviced office provider, Workplace, said that demand from SMEs was strong and rentswere continuing to rise. This office market has grown, partly because companies like a short term contract or are wary of the impact of Brexit and don’t want long leases.