Market Update Q4 2016, welcome to the fourth and final update of the year, giving you an up-to-date view of the office, investment & development market west of the West End. Included in this issue: office supply, current rents, notable offices, annual review and planning consent.
Q4 MARKET SUMMARY – Market Update Q4 2016
In this Market Update Q4 2016 the Government announced the 3rd Runway at Heathrow and Zak Goldsmith lost his Richmond seat in what he had hoped would be a protest against that decision, but instead appeared to be a protest against Brexit. Access to Heathrow is often cited as a factor for companies relocating to west London and in particular Hammersmith is popular with airlines.
This quarter both airlines Cathay Pacific and Egypt Air relocated their offices in Hammersmith but the largest letting locally was Yoox Net-a-Porter Group’s 70,000 sq ft letting of the part 1st and part 2nd floor at White City Place on the former BBC Estate. They also leased a further 6,000 sq ft in Westfield London which will continue to be their HQ. The take-up of 113,000 sq ft of offices in London Borough of Hammersmith and Fulham in Q4 was the highest quarter of the year, although the total take-up for 2016 of 255,000 sq ft was 15% down on 2015 as Brexit caused indecision.
Supply reduced across the west of West End:
- Chiswick decreased from 4% to 6.4%
- Paddington decreased from 3.5% to 2%
- RBK&C decreased from 2.9% to 5%
- LBH&F decreased from 13.1% to 4%
Other notable office lettings include two new lettings at The Aircraft Factory in Hammersmith; the technology company Gram Games (that make the ‘1010!’ game) and Kwiff (the gambling app) taking 5,000 and 3,800 sq ft respectively. Virgin Management took 7,172 sq ft at 66 Porchester Road next to Royal Oak Station in W2 and Douglas & Gordon moved their head office from Victoria to the 7,000 sq ft ground floor at 212 New Kings Road at Fulham Green. Hoegh Capital and Endeavour Mining both took 10,000 sq ft floors at 5 Young Street, Kensington. Fashion designer, Amanda Wakeley took 3,000 sq ft in Logan Place, W8, although most recent press interest has been focused on her racy leather trousers as worn by Theresa May. In Chiswick, the former Decca Records and Universal building, Bond House, 347-353 Chiswick High Road was let to HCA Healthcare (owner of The Lister and Portland Hospitals) for £47.50 per sq ft.
Notable investment sales include Brockton Capital selling on 10 Hammersmith Grove for £103.5m to Tai United from Hong Kong. It was bought for about £89m from Aberdeen UK Property Fund in the wake of the Brexit vote when the fund was suspended and Aberdeen had to sell properties quickly to meet redemptions.
Helical Bar sold One King Street to Orchard Investment Management for £34.5m a net initial yield of 4.85%. Fruition sold the newly constructed office building 11 Beavor Lane in Ravenscourt Park to The Omni Group for £3.2 (£619 per sq ft).
Best rents per sq ft are:
- £57.50 Hammersmith
- £65 in Kensington and Paddington
- £80 in Victoria
- £55 in Shepherd’s Bush and Vauxhall
- £52.50 in Chiswick
- £50 in Fulham and White City
HEADLINES – Q4
16 THE VALE – Planning Market
Amplio Developments has been granted planning permission by the London Borough of Ealing for the conversion and extension of Newman Hire’s former warehouse on the border of Shepherds Bush and Acton. The scheme will provide 39 flats (13 affordable) and 11,500 sq ft of commercial space in a scheme totaling 49,500 sq ft.
Amplio bought the 35,000 sq ft art deco warehouse building from Newman Hire in July 2016 who relocated to new premises in Hayes.
16 The Vale is a four floor art deco style stone and brick clad warehouse with steel crittall windows, originally built by Brown Brothers Engineering in 1928. Brown Brothers were manufacturers of aircraft parts. Newman Hire hires out antiques and props to the film and TV industry. The new scheme retains the handsome art deco facade.
NOTTING DALE & NOTING DALE – Office Planning Consent
South Block, Notting HIll Gate
In the same planning committee this quarter RBK&C granted two substantial office consents. One was the redesign, refurbishment and improvement of the Notting Hill Estate by architects Squires for Frogmore and the other was for the construction of a new office building at 134-136 Bramley Road in Notting Dale, W10 designed by architects, Stiff + Trevillion…
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ANNUAL REVIEW – Market Update Q4 2016
Office lettings and transactions
The year began strongly with double the take-up of Q4 2015 in Q1 as a raft of supply reached practical completion and was speedily let. 33,500 sq ft was let at newly refurbished Aircraft Factory in Cambridge Grove Hammersmith and…
