With the market tightening this summer in terms of the provision of office space it is good news to hear that developers are putting their hands in their pockets and coming up with schemes to provide a much needed residential, retail and office space in London. 

Plans are in progress to relocate the staff and operations of London’s War Office, situated near 10 Downing Street. It is anticipated by the Defence Secretary Philip Hammond, that the relocation, which will place staff under one roof – of the main building, will save around £8 million a year. The move will take place next year, 107 years after construction of the Ministry of Defence building was complete. 

The fact that developers are targeting London’s climbing residential market has been demonstrated recently by an application from a developer in South London to renovate an empty 1960s office building. Unfortunately for the developer, the Planning Inspector did not agree that the proposals were adequate to meet required affordable housing provisions. In fact, the developer had not included any such provisions, on the basis that doing so would make the scheme unviable.

It has been revealed this week that Standard Life is buying the London headquarters of the television channel, QVC, known as Building 8. The property, in Chiswick Park on Chiswick High Road, and comprising 126,000 square feet over five floors, is costing the asset-management buyer £71 million, in a deal that had attracted much interest from other investors, and which is £2 million over the original price asked by the seller, Schroders.

Since the recession, which is now almost 6 years ago, landlords for commercial space have been forced to change their attitudes towards tenants regarding the surety that they require from incoming tenants. This is because over the past 5 years landlords have seen many of their tenants get in to deep water and not be able to survive, therefore leaving them with empty dilapidated spaces. At this point the landlord has to re-furbish the space then re-let the space causing significant capital costs as well as a void period while re-marketing the space.

It won’t come as a surprise to fellow property personnel’s, as well as those searching for opportunities in the market, that there is a major lack of supply of office space at the moment. Not only is there a lack of supply of leased office space but there is practically nothing coming to the market in regards to freeholds, virtual freeholds and long leaseholds. 

As any property professional will tell you, the property market tends to slow down quite drastically come the last couple of weeks of July and for pretty much the whole of August, mirroring the school summer holidays. While this pattern is common in many industries, the property industry seems to feel it more intensely than most. It may even have become a self-fulfilling prophesy whereby things are quieter because people expect them to be so. 

According to a new report on the UK’s property market, the value of commercial property increased last month, amounting to the third month of growth in a row.  The report, by Investment Property Databank, looked at values of offices, warehouses and retail properties, and indicates that confidence in the market is steady and positive at present. 

The popularity of Central London property for investors from overseas is continuing according to recent figures. Of particular interest in the current climate is newbuild residential property in prime London locations. Chesterton Humberts indicates that as much as 65 to 75% of such newbuild homes in the capital have been sold to investors during the last two years. And the numbers of overseas purchasers over the last four years has increased by 56.3% – certainly not something that could have been predicted back in 2009. 

A recent report undertaken by CBRE, under their UK Monthly Index is showing that in the month of July the performance within the commercial property sector has continued to improve. Capital values have apparently increased by 0.4% which is now the fourth consecutive month of positive growth.