The first signs of luxury brands moving to Offices in Kings Cross emerged last week, as it is understood that Louis Vuitton UK are in advanced negotiations. Louis Vuitton UK are looking to acquire 7,000 square feet on the fifth floor of One St Pancras.

On 23rd September 2013 we reported on the potential need for the building known as Heron Tower, near Liverpool Street station, to be put into administration, in part because of its relatively low take-up of floor space since its construction. However, it would appear that the building’s future may be somewhat more secure than in recent weeks.  To keep receivership at bay, Starwood Capital, the US private equity group, has contributed to the refinancing of the building, in a deal worth £288m. 

Mayfair is now the most expensive area to locate a business, beating Hong Kong which previously topped the charts. Offices in Mayfair, Soho and St James’s are not only highly priced but there is also a huge lack of stock on offer as well. 

Quarter one reported investment turnover for offices in Midtown of about £260 million, quarter two increased to about £980 million which is a substantial increase. The key reason behind this is that in quarter one the transactions were made up by considerably smaller lot sizes mainly driven by UK institutions.

Serviced Office Group Plc, now the second-largest serviced office provider in the UK after Regus, since its purchase of rival Avanta in July of this year, has reported higher revenues for the first half of this year, although its profits were damaged by opening a new location. 

The continuing and consistent popularity of the West End has kept prices high over the last 12 months. Added to this is the trend for turning the old, grand residential houses, which have been used as offices for years, back to luxury properties for the wealthy – who are often overseas investors. The demand that is queuing up for square-footage in the area, as well as the residential conversions, has led to a shortfall in supply – and the demand shows no sign of waning. 

Google’s charge on the Capital continued last week as their attentions turned to the town hall in Camden. Google, paired with Argent have lined up an initial bid for the 100,000 sq ft town hall and council offices, which sits opposite St. Pancras station. Google and Argent are already working in partnership as they continue to build Google’s new 1.2 million square foot headquarters in the heart of Kings Cross, which sits in the middle of the Argent redevelopment scheme.

One of the UK’s highest skyscrapers is facing possible sale by the bank that financed the project, which was completed in 2011. The building has failed to let to the expected extent, being only 59% occupied at present.  Heron Tower is 46 storeys high and is situated close to Liverpool Street station. The property is owned by a trust that includes Heron International, which gives its name to the building. Other members of the trust include Oman’s largest sovereign wealth fund and Saudi backers. 

We have already seen property investment yields fall in non-core markets, a year ago we were seeing prime yields outside the core at around 5% those yields have come in by 25-50 basis points to 4.5-4.75%. There are two factors that have contributed towards these movements of yields. 

London’s skyscrapers may shortly be gaining a new companion. In the vicinity of the City’s financial district, and near to the recently completed tower at 20 Fenchurch Street, also known as the Walkie Talkie, the new building would be approximately the same height as its neighbour, at 600 feet tall.