Good morning. Here’s your daily round-up of the latest news and views from EG and a collection of industry-relevant headlines from the nationals.
If there is one part of the office market that is getting stronger and stronger – one well-known brand aside – it is flex, and the team at Grosvenor are keen to get in on the action.
The landed estate has plans to convert one-fifth of its UK office stock into hospitality-led flex space, building a 300,000 sq ft portfolio.
Grosvenor already has some 135,000 sq ft of flex space across its portfolio.
James Raynor, chief executive at Grosvenor Property UK, told EG’s Tim Burke: “Flex and our ongoing investment in new products and services that meet changing occupier needs is a core part of our growth strategy. We are moving quickly and, by the end of this year, we expect to have delivered over half of the space dedicated to this plan.”
Evidence around the strength of the office market continues to build – with 2023 being a particularly strong year for flex. This morning, fresh figures from Cushman & Wakefield showed that flex workspace providers had signed for 867,000 sq ft of space across 31 deals in central London last year – the highest level since 2020.
Ben Cullen, head of UK offices at Cushman & Wakefield, said: “While we expect some large-scale occupiers to downsize or consolidate their offices, the volume of expanding occupiers demonstrates central London’s desirability as an office centre for both small and larger businesses, countering the narrative that all occupiers are downsizing amid challenging economic conditions.”
He added: “Robust 2023 leasing activity, stabilising vacancies, high requirements, and a tight development pipeline are all putting upward pressure on office rents. However, as debt markets stabilise and inflation eases, income-driven investment opportunities across central London will become more popular, potentially triggering new development starts that were due to begin beyond 2025.”
Find out more about the Future of the Workplace by joining EG at our flagship offices event in June.
Talking of robust, what about the booming build-to-rent sector. EG’s residential expert Akanksha Soni takes a dive into the flurry of Q1 figures for the sector, to compile five must-know insights about BTR in 2024.
Spoiler alert: volumes are up, operational assets are hot property and prices are stabilising.
And, in case you missed it on Friday afternoon, there was big news in the life sciences property sector as Sir Stuart Lipton teamed up with London-based start-up Galileo Labs to create a £1.5bn portfolio. Exclusively revealed by EG’s Evelina Grecenko, developer Lipton Rogers and Galileo will focus on sites in urban locations near universities, enabling easy access to academic resources, talent and collaboration opportunities for both start-ups and grow-on life sciences companies.
Simon Tuddenham, managing director at Lipton Rogers, said: “The partnership brings together the hardware and software required to develop and operate first-class laboratory space. Developing projects of substance, pushing the boundaries of design, sustainability and usability is what we believe in.”
Elsewhere in the world of real estate, the disposal of more than £1bn of property has helped the UK government reduce its emissions by 14%, Cushman has picked up a five-year contract to manage Standard Chartered’s 11m sq ft global estate, and Helical is feeling cautiously confident as the race for best-in-class office space intensifies.
All of the news from EG, plus a selection of headlines from the nationals:
Helical “cautiously optimistic” as best-in-class space reduces
CapReg appoints former Capco SID as non-exec
Trading steady as demand softens for Lok’nStore
City leasing levels match decade-highs
Five things we learnt about BTR in Q1
Grosvenor maps out 300,000 sq ft flex portfolio
Lipton makes life sciences debut with £1.5bn jv
Standard Charted selects Cushman for 11m sq ft global estate
UK government generates £1bn from property sales
Should you win an EG Award?
Climate tech leader takes helm at Infogrid
Middle East and Chinese investors hover around Selfridges (£)
Norway’s sovereign wealth fund to take control of Meadowhall (£)
How PwC got burned by China’s big property bust (£)
Estrella Damm taps Bedford for its first British brewery (£)
More trouble for leaseholders as Gove loses ground rent battle (£)
Zuber Issa in talks to sell his stake in Asda (£)
Rebates loom over warehouse merger plans (£)
Tories considering stamp duty cut in autumn statement (£)
Confidence returning to property market as asking prices rise (£)
Norway’s $1.6tn fund turns developer on trophy UK properties (£)
Thames Water-linked property firm paid £14m in dividends
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