Market Update Q1 2018 – Commercial Property West London

Market-Update-Q1-2018-Commercial-Property-West-London-Frost-Meadowcroft

1st QUARTER 2018 Welcome to the first update of 2018, giving you an  up-to-date view of Commercial Property West London, investment & development market in west London. Included in this issue: planning consent for former Trojan Records Factory, planning applied for Imperial College London. Offices sold West London: Empress State Building, multiple investment sales Hammersmith, co-working take up, office supply and current rents.

 

MARKET SUMMARY – Take-Up

Commercial Property West London
In the Royal Borough of Kensington & Chelsea office take-up for Q1 2018 was treble that of Q1 2017 as Frost Meadowcroft client Frogmore, pre-let 41,000 sq ft at 92-94 Notting Hill Gate, W11. Serviced office company, The Office Group, owned by Blackstone, took the Squires Architects‘ designed building at the junction of Pembridge Road for a rent in the mid £60’s per sq ft. Refurbishment of the building will be complete in Q1 2019.
In Battersea Publisher Dorling Kindersley has agreed to take 44,000 sq ft on 3 floors at One Embassy Gardens for £55 per sq ft. This is alongside its sister company Penguin Random House who has already agreed to take 83,400 sq ft on 5 floors at this new office building in Nine Elms, SW8. The new Nine Elms Northern Line Underground station is due to open in 2020 and will be a Zone 1 station in the London Borough of Wandsworth.
DK will move from their office in The Strand by 2020 to this Ballymore development that has views over the River Thames.
In Q1 2018 office take-up in the London Borough of Hammersmith & Fulham (LBH&F) was 155,000 sq ft – double the take-up level of Q1 2017 which was 75,000 sq ft. This is a good level but new supply such as the 275,000 sq ft 2 Televison Centre next to the BBC in Shepherd’s Bush, White City means that availability in LBH&F has only reduced to 9.9% from 10.9% in Q4 2017.

MARKET SUMMARY – Rents

Commercial Property West London
Although the best rents in LBH&F for new and refurbished offices are £50 to £55 per sq ft, the wider spread of availability means that some local businesses are preferring to pay rents of £40 to £47.50 per sq ft for some of the older buildings.

Market-Summary-Q1MU-2018-Logo-Strip-Commercial-Property-West-London

In Hammersmith This has been illustrated by companies such as Juice Plus, a nutrition company, and CRF Health, a science company, that took 26,000 sq ft and 17,000 sq ft at Waterfront W6 for £48 and £47 per sq ft respectively. In Kensington Arrival, an electrical vehicle manufacturer paid £49 per sq ft for 20,000 sq ft at Beaumont House, Kensington Village W14 in Olympia this quarter. In Shepherd’s Bush Gousto, a recipe box company, took 13,500 sq ft at Shepherds Building for £52.50 and £50 for 2 parts of the 1st floor and £42.50 sq ft for the lower ground floor.
Also in Hammersmith Sensée, a homeworking outsourcer paid £52.50 for 1,706 sq ft at The Clockwork Building in Ravenscourt Park together with tech companies Shipserve and Intelligent Reach. These deals mean that 13,716 sq ft of the west London building have now been let, with a further 26,284 sq ft available.

Office Supply at a Glance

  • Hammersmith & Fulham down from 10.9% to 9.9%
  • RBK&C down from 2.7% to 2.5%
  • Chiswick down from 13.3% to 13.0%
  • Paddington down from 4.7% to 3.4%
  • Wandsworth up from 1.8% to 2.2%

West of West End Office Rents at a Glance

  • Hammersmith & Fulham £40 to £55 per sq ft
  • Chiswick £35 to £47.50 per sq ft
  • Nine Elms (LB Wandsworth) £55 per sq ft
  • Paddington £59 to £71 per sq ft
  • RBK&C £40 to £70 per sq ft

Q1 HEADLINES – Commercial Property West London

FORMER TROJAN RECORDS FACTORY
Gets Planning Consent at 326 Kensal Road, Ladbroke Grove

Former Trojan Records factory Gets planning consent at 326 Kensal Road, Ladbroke Grove
CGi The Gramophone Works

Architects Studio RHE have received planning consent for developer Resolution’s, Gramophone Works W10. The 2-storey, original  structure will be converted and extended to be 5 storeys of offices, studios, a public café, roof garden and independent retail. The property will be 85,000 sq ft and overlooks the Grand Union Canal just next to Innocent Drinks’ headquarters at the Canal Building,
Portobello Dock. 

The Gramophone Works has previously housed reggae record label Trojan Records and will be completed in two phases. The first phase consisting of buildings originally built in 1919 is set to complete in the summer of 2018. Works on the second phase will commence in Autumn this year and are due to complete at the end of 2019.

EPRESS STATE BUILDING SOLD TO THE POLICE – Office Building Sold in West London

Commercial Property West London

Empress State Building, Commercial Property West London
Empress State Building, Sold to the Police

The Mayor’s Office for Policing and Crime (MOPAC), the long-term occupier of the Empress State Building, have purchased it from Earl’s Court developer, CapCo for £250m (£554 per sq ft). 

The 451,000 sq ft office building is named after the Empress Hall and Ice Rink which formerly stood on the site and in tribute to the Empire State Building. Built in 1961 it was briefly the tallest commercial building in London until Millbank Tower was built in 1962. It was originally designed as a hotel but was first used by the Admiralty and GCHQ. 

CO-WORKING & SERVICES OFFICES DOMINATE TAKE-UP
Commercial Property West London

Offices-Let-West-London-Co-Working-Serviced-office-Pie-Chart-Grapic
Offices-Let-West-London-Co-Working-Serviced-office-Pie-Chart-Grapic

In terms of square footage of offices taken since June 2017, just under 40% of the offices let in LBH&F have been in the co-working and serviced sector. Another 40% of total take-up has been to media (17%), fashion (12%) and technology (11%). The pie chart opposite shows the sectors and amount of square footage taken in commercial property West London. In terms of the most numbers of conventional leases taken rather than area taken, technology was the leading sector with 10 technology companies taking offices since June 2017. 

IMPERIAL COLLEGE LONDON
Dairy Crest site application submitted 

Commercial Property West London

Commercial Property West London
CGI’S IMPERIAL COLLEGE – Commercial Property West London

An outline application was submitted to LBH&F in Q1.

It is for a phased mixed-use masterplan comprising seven main development zones to accommodate six 13-storey buildings with up to nearly 2 million sq ft for research & development, offices, as well as 373 homes in buildings of up to 18 and 32 storeys, a hotel of up to 8-storeys and uses including retail, café, restaurants, bars, community and/or leisure uses. 

There will be a new access bridge over the Central Line and Stadium House, the blue-glazed 1982 constructed office building fronting Wood Lane, will be demolished.

Q1 MULTIPLE HAMMERSMITH INVESTMENT SALES

Thames-Wharf-Studios-The-Aircraft-Factory-401-King-Street-Commercial Property West London
Thames-Wharf-Studios-The-Aircraft-Factory-401-King-Street-Investment Sales

A large number of investment sales were transacted in Q1. Frost Meadowcroft clients Westbrook’s The Aircraft Factory and London & Regional’s Thames Wharf Studios were both sold following successful letting campaigns.

In addition 12 Hammersmith Grove, 227 Shepherds Bush Road in Hammersmith and 401 King Street in Stamford Brook were also sold. 

Multiple-Commercial Property West London
Multiple-Commercial-Investment Sales

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