L&G launches flexible office market
According to CoStar, one of the largest real estate owners/asset managers has started a flexible office leasing platform across its portfolio as a “new approach for institutional landlords, focused on creating an offer reflecting the best of traditional and more flexible leasing”.
The new platform is called “Capsule” and is available on all appropriate office holdings irrespective of size or location.
Legal and General said, Capsule will offer “speed and flexibility in taking space, while retaining the benefits of leasing from a well-respected and established institutional owner and having control over the accommodation”.
The five main elements of Capsule: Short form leases: a “clear standardised lease has been developed across only a few pages which can be offered on an all-inclusive basis, including dilapidation costs”.
Fit out: the accommodation will be offered with “CAT B and critical furniture (desks, meeting rooms, IT) options to enable ‘plug and play’ occupation”. Occupiers will still be able to undertake further CAT B works or brand the space as they like.
Wayleaves: IT infrastructure will be in place to “avoid frustrating and costly delays over wayleave negotiations with providers”.
More flexible lease terms: Legal & General said it “accepts the trend of shorter leases and believes that income risks can be mitigated by better service”.
Building experience: L&G says that “by ensuring the buildings are well- run and welcoming to staff and their guests we will enhance the flexible offer and enable occupiers to move between Legal & General assets as their business needs change with the confidence of consistent service. Our property management service is currently under detailed review as we strive to redefine how our buildings and occupiers are serviced”.
Business Space Research Manager, Bill Page said, “The office leasing market has changed structurally over the last three years with the rise of flexible leasing platforms, led by, but not confined to, London. This has provided challenges and opportunities for investors, occupiers and agents alike. New co-working providers have expanded aggressively and their more established peers have fought to keep up.
“Capsule is not a “product” and there is no disintermediation of agents involved or intended. However, it is a re-imagined process offering the market an attractive and mutually beneficial option, acknowledging the frustrations that send many occupiers towards flexible providers, while retaining the traditional benefits of leasing from an established provider.”
London office construction figures decreases
Over the last six months, office space under construction within the Central London has fallen by 13% according to Deloitte’s London Office Crane Survey.
The figure has decreased to 11.8m sq ft but is still above the long term average of 10.5m sq ft. The City of London has been dominating the development activity with 6m sq ft (51%) of the capitals office construction.
London’s West End has hit the ground running with 12 new schemes totalling 754,000 sq ft, the highest volume since early 2015 which has increased the submarkets total to 1.7m sq ft under construction. Midtown, Southbank and King’s Cross were the only other Central London submarkets to record new starts.
The director in the capital projects advisory team at Deloitte Real Estate, Mike Cracknell said, “With 40 schemes totalling 4.2 million sq ft completing this survey, this is the highest level of office space brought to market in over 14 years. 2018 is witnessing unprecedented office completions and we are expecting almost seven million sq ft to be completed before the year is out. The 13% decline in construction is therefore driven by these completions rather than any significant reduction in new starts.”
City of London Corporation complete site deal for major fraud and cybercrime court
CoStar reveals, 68-71 Fleet Street was sold to The City of London Corporation by Royal London Group for an undisclosed price to proceed with major courts facility development.
The building offers 31,600 sq ft will include a new City of London Police station and will form part of the Fleet Street Estate site for a combined courts facility which is designed to tackle fraud, cybercrime and economic cases.
The court will replace ‘Mayor’s and City of London County Court’ and ‘The City of London Magistrates Court’ that will deal with business and property work will contain 18 courtrooms.
The City of London announced the project back in October 2018 and the location has been set. Engineers and architects will be appointed by January 2019. Planning and arrangements for building the new court is being finalised and expected to be completed in 2025.