Welcome to Q3 of our west London office news quarterly, the third update for 2023, giving you an up-to-date view of the commercial property market in west London. Featured in this issue: Market Summary, Take-Up, Q3 Headlines, ESG feature, The Ark re-launched & much more west London news
Another quiet quarter in the west London office market. Occupiers are still being cautious, resulting in a number of lease renewals taking place instead of moves. From an agency perspective, we have seen an increase in enquiries within the market compared with Q1 and Q2 of this year. On a further positive note there are currently a couple of 15,000+ sq ft deals close to completion in Hammersmith and White City which, we hope, will make some good news for our Q4 Update.
In the meantime, smaller sales with conversion potential seem to be attracting interest although in the wider investment market, buyers continue to be extremely cautious particularly in the office sector.
In the occupational market, more landlords are fitting out smaller spaces speculatively to meet the demand from occupiers for fitted space, particularly those companies coming out of the serviced / flex market.
Frost Meadowcroft finalised a deal with Magnet Ltd for the retail space at Botanic House W4, 309-313 Chiswick High Road a total of 4,951 sq ft at £36.36 per sq ft on a 10 year lease. Further up the road at Chiswick Tower W4, the equity firm FinNest took 2,700 sq ft on the 17th floor at a rent £42 per sq ft for 5 years. In Chiswick Park W4, in Building 6 the global engineering company Bechtel agreed on a sublease on 24,161 sq ft for £47.50 per sq ft for 10 years from Aker Solutions.
In Fulham at Melbray House SW6, Lingerie London Ltd, designers of high-end lingerie, signed a lease for 5,098 sq ft taking the whole building at £36.78 per sq ft for a 5 year term. At Coda Studios Channel 9 Australia, agreed on 1,324 sq ft for £45 per sq ft for 5 years.
At Lyric House, CausaLens the Causal AI software company took 3,767 sq ft at £50 per sq ft for 3 years.
Oman Air signed up at Heritage House for 2,071 sq ft at £35 per sq ft for a 5 year lease.
AC Fashion Design agreed on 2,849 sq ft on the 1st floor of Colet Court for £30 per sq ft for a 3 year term.
Our client Romulus agreed a deal in Q3 at 3 Shortland with Tesla for 7,650 sq ft on a managed basis.
The most notable deal in Hammersmith and west London in Q3 was at 12 Hammersmith Grove W6. IWG (Regus Spaces), the largest international workspace provider, are taking over from WeWork taking a total 56,337 sq ft.
Read more Headlines…
On the sales front in Hammersmith it is reported that Federated Hermes sold Sovereign House at 361 King Street for £3.8 million with an 8% yield and capital value of £280 per sq ft. Columbia Threadneedle brought the “Capital Portfolio” to the market. Of the 6 office buildings, 4 are in west London, and offers are now invited for the individual assets. Mansell Court, Wimbledon was acquired by Korol Group, and we understand that Grove House, 27 Hammersmith Grove has exchanged contracts. 63 Kew Road, Richmond and Premier House, Twickenham remain available.
KENSINGTON & CHELSEA
In Kensington HCA International Ltd took the Universal Building W14 part 1st floor totalling 2,315 sq ft at £37.50 per sq ft for a 10 year term.
In Chelsea, Bon Bon Ltd took a lease at Plaza 535 SW10 for £24.83 per sq ft for a 5 year term.
HEADLINES Q3 west London office news quarterly
Landlords & Tenants will find Environmental, Social and Governance considerations are increasingly important in today’s environment of accountability and transparency. Collaboration between landlords & occupiers is key as we strive to achieve our ESG goals.
In the property industry, the EPC ranking has become standard and is a useful starting point on the energy efficiency aspect. However older buildings can be tricky to adapt with planning restrictions and cost considerations.
The BREEAM rating helps further by assessing the Environmental & Social elements, though this is not always available with older and smaller buildings.
Social and Governance is a little more complicated to understand. Here is our quick guide for landlords & occupiers.
The ENVIRONMENTAL aspect of ESG focuses on how business minimises its impact on the environment. Occupiers are increasingly looking for energy-efficient rental properties.
Environmental business practice
- Reducing energy, using renewable energy
- Employing greener services.
- Aim for zero-waste, with facilities to encourage recycling and reduction of waste.
- Reducing emissions with LED lighting. Insulation etc.
The SOCIAL aspect focuses on how a business impacts the wider society and workplace culture.
- Health & wellness, such as fitness centres on-site.
- Prioritise inclusivity in their hiring and occupier selection processes.
- Providing training and supporting health, safety and wellbeing,
- Promoting equality in the workforce with diversity and inclusivity policies.
- Investing in local community projects.
The GOVERNANCE refers to the process of decision-making, reporting, and the logistics of running a business.
- Good governance can appeal to investors & occupiers and help enable a business to grow.
- Ensuring that companies are operating ethically and transparently, with a focus on fair and equal treatment of all stakeholders.
- To undertake business ethically, such as preventing bribery, promoting equality and diversity.
LandSec as London’s largest office owner has the scale, budget, and numbers to provide effective data .In the battle to cut carbon emissions, LandSec are spending £135 million over the next 7 years at their 100 Victoria Street headquarters. LandSec started working with Canadian company Brainbox AI on using artificial intelligence (AI) and how it could be used in its portfolio about a year ago. The trial of the AI system at its 100 Victoria Street HQ began just over three months ago. A monitoring device attached to the Building Management System of a property collects data on the building’s energy use from the various systems in operation, employing sensors to collect data on factors like room temperature and occupation to mimimise energy consumption.
IWG who own workspace brands Regus & Spaces has agreed to take over 55,000 sq ft of workspace in Hammersmith, from its ailing competitor WeWork.
12 Hammersmith Grove will be re-launched under IWG’s ‘Spaces’ brand, offering dog-friendly private offices, with meeting rooms and co-working spaces.
WeWork’s interim chief executive David Tolley said it planned to renegotiate “nearly all” of its leases around the world.
Thomas Sinclair, group chief development officer at IWG, said “it was a testament to our business model to see an increasing number of landlords & investors taking space with IWG.”
IWG recently reported record revenues of £1.7bn, taking advantage of its rival’s financial struggles.
Britannia Invest A/S (Dutch subsidiary of Britannia Invest Holland B.V.) have finalised the sale of Liberty House, 76 & 80 Hammersmith Road. The purchasers MRP, are the property development and investment arm of McAleer & Rushe.
The site comprises two six storey buildings of 90,000 sq ft, located next to the new Kensington Olympia regeneration project.
Frost Meadowcroft are currently marketing the vacant offices at 80 Hammersmith Road.
The Ark is back …
After an extensive refurbishment Al Duwaliya Asset Management have regenerated this iconic west London landmark breathing new life into a building that was truly ahead of its time in the early 1990s. Recently relaunched, offering 135,000 sq ft of office space over 5 floors with 9,000 sq ft of external terraces and of course, the building’s signature crow’s nest meeting room perched on the top.