CB Richard Ellis (CBRE) has secured new offices in the West End of London pending the expiry of their current lease at Kingsley House, Wimpole Street W1 in May 2011. CBRE has entered into an Agreement for Lease to take Henrietta House, Henrietta Place, W1 which is being vacated by Diageo.
The landlord, Lazari Investments, is taking a surrender of the residue of Diageo’s lease in order to completely refurbish the building in readiness for CBRE’s occupation.
Following an innovative approach to the transaction CBRE will deliver the scheme on behalf of Lazari. CBRE will take an over-riding 15-year lease on the entire building, totalling approximately 98,000 sq ft. This will allow CBRE to manage the property for its own and the landlord’s benefit.
Reuters reports UK Commercial Property Trust (UKCM.L) (UKCPT) is taking over F&C Commercial Property Trust (FCPTL.L) (FCTP) to create Britain’s sixth-largest listed property company, worth about 1.6 billion pounds ($2.5 billion).
UKCPT’s move follows the sale in April of a 16.5 percent stake in FCPT to the Phoenix Group, the parent company of UKCPT manager Ignis Asset Management Limited, from key FCTP shareholder Friends Provident.
Friends Provident and Phoenix, which have a combined 50.3 percent stake in FCPT, agreed on the deal, which is subject to approval from the trust’s independent shareholders.
The combined portfolio would have a 60.5 percent weighting to London and the South East, with 27 percent of assets located in the capital’s popular West End business district, research from UKCPT advisor Execution Noble showed.
Shaftesbury Plc, the largest landlord in central London and the West End reported its first profit in more than two years after the value of its properties appreciated.
Values started to recover a year ago after a drop in the pound and a two-year slide in prices buoyed investment demand. Shaftesbury’s owns over 450 properties in Carnaby, Covent Garden, Chinatown, Berwick Street and Charlotte Street.
The West End Property Company earned 122.7 British pounds ($176 million) in the six months ended March 31, after losing £159.9 million in the prior-year period.
“Although the outlook for the UK and European economies remains uncertain, London’s West End is prospering,” Shaftesbury Chairman John Manser said.
Commercial property insurance policyholders in the West End and City areas of London should see strong rental growth this year.
The report suggested that the London market would outperform other European cities, with prime office rents in Paris expected to be stable and Brussels suffering from over oversupply.
Warsaw and Prague have seen vacancy rates rise by 7.9 per cent and 11.9 per cent respectively, the figures showed.
Kelvin Davidson, property economist at Capital Economics, said that there is optimism towards the performance of the UK market this year.
“The recent data has been a lot stronger,” he commented.
France is another sector which could enjoy positive growth this year, according to Fergus Hicks, also a property economist at Capital Economics.
“Certainly it seems that France led the investment recovery in terms of Europe after the UK last year, so it is one of the stronger investment markets this year,” he said.
Monaco-based property and development company M1 Group will spend GBP400 million on property this year despite increased competition, after signing the largest office deal in London’s West End since 2007, Chief Executive Moustapha El-Solh said.
The private company, which is looking to invest in prime property with good tenants ensuring stable income, has cash to invest. Because it doesn’t need to arrange financing, M1 can move quickly and secure exclusive talks.
“The past 12 months have been hectic and there is a lot of competition in London’s property market … but vendors prefer all-equity buyers” to secure deals, said El-Solh.
Although there is more competition, there also are more properties coming onto the London market. Property consultants Jones Lang LaSalle currently is marketing London trophy building 1-3 Buckingham Gate for £78 million, the National Magazine House at Carnaby Street for GBP45 million and Charlotte House at 11-14 Windmill Street for GBP15 million.
While prices are firming up and there are more overseas buyers and institutional investors in the market, El-Solh is confident of beating rivals because of M1′s cash position. “We have the financial resources to close deals,” he said.
Wall Street Journal
Property group Shaftesbury said it saw booming business in the West End despite fragile economic recovery.
Shaftesbury said that buoyant market conditions during Christmas and New Year led to record levels of activity in West End cinemas, museums and theatres.The tourist boom made shops and restaurants in the area to secure new lettings at higher rents than expected by the company.
Net rental income climbed 12 per cent to settle at 69.2 million pounds. Total estimated rental value of commercial vacancies decreased from 3.2 million pounds in September last year to 2.5 million pounds per year.
The company said its total vacant space dropped from 70,000 sq metres to 55,000 sq metres.
Shaftesbury has also named British Fashion Council’s CEO Hilary Riva as its non-executive director.
Shares in Shaftesbury shed 2.9p to close at 376.7p-a-share.
London’s Leicester Square and Covent Garden have been named safe and attractive places to visit in a national scheme.The areas in London’s West End have been awarded Purple Flags by the Association of Town Centre Management.
The scheme assesses each area’s crime rates, hygiene standards and range of visitor attractions.Westminster City councillor Daniel Astaire described the award as an “incredible achievement”.
The Purple Flag scheme aims to recognise high city standards in the same way that Blue Flags indicate good beaches and Green Flags recognise good parks.
The Home Office-backed scheme also hopes to encourage more city centre visitors between 1700 and 0600 GMT.
Extra police and floodlights were installed in the West End in December last year, along with a giant screen displaying travel information.
Last month the number of serious violent offences in the West End fell to seven, compared to 11 in December 2008.
Land Securities and British Land are to say that property values began to rise again in the third quarter, confirming that a recovery in the market is feeding through to the books of the large real estate investment trusts.
The tail end of the slump in the second quarter is expected to weigh on overall half-year results, however. Harm Meijer, analyst at JPMorgan, said that positive revaluations had started but added that more significant increases would have to wait until the next quarter.
The company’s statement is expected to focus on its development programme. Land Securities stated its intention to develop two schemes in London’s West End in its last set of results.
After a long downward spiral lasting the better part of a year, the London real estate market seems to be finally looking at a turnaround. A host of companies including Google and Royal Dutch Shell are reported to be scouting around for space in the City for their offices. This comes as welcome news for the London real estate market reeling under dropping rentals and rising vacancy levels.
According to real estate consultants Cushman & Wakefield, Royal Dutch Shell, the oil company, is looking at around 220,000 sq ft of office space while Google needs around 145,000 sq ft. Apart from these two, other interested buyers are also present in the market, such as insurer Aon Corp and Centaur Media, the publishing house.
There were a number of buyers in the beginning of 2009 who had held off making decisions due to the downward trend in the market. These same buyers now seem to be ready to commit, indicating a turnaround for offices to rent London likely in the coming months. According to industry figures, rental take-up for office space in the City has gone up by nearly 65% in the third quarter of the year, as compared to the previous quarter.
Property rates as well as occupancy levels during the second quarter were at their lowest in over ten years, and real estate management firms in the City like Hammerson, British Land and Land Securities were some of those most affected by the downturn. The new demand is likely to push up office space requirements by over 9 million sq ft, a rise of nearly 20% over the beginning of the year.
infogleam
Investment activity in London’s commercial property market has risen again for a second consecutive quarter. Figures for Q3 2009 show that £1.602 bn was invested in central London’s main West End and City & Docklands markets, an increase of over 12% on Q2’s total of £1.432 bn and a 29% rise on the same quarter last year. It is the first time the capital has delivered two quarters of consecutive growth since Q2 2007.
The dominant buyers continue to be overseas investors attracted by the weak pound and the very attractive returns achievable resulting from London’s relatively rapid price correction compared to other markets across the world.
Transaction volumes in West End up 24% on previous quarter
The West End again showed the biggest increase in activity with £909m invested; an increase of 24% on Q2’s total of £732m and up 32% on Q3 last year. There was no sign of the ‘traditional’ summer break with vendors keen to take advantage of the purchaser demand which has been building up throughout 2009.
In excess of 70% of all transactions were by non-UK buyers with London staying firmly on top of many international investors’ shopping lists. Reasons for this trend include the continuing weakness of the pound and the fact that the London/UK market has corrected more quickly than other global markets providing investors with relatively attractive returns.
IMMONEWS
