Welcome to the fourth and final update of 2018, giving you an up-to-date view of commercial property in West London. Featured in this issue: Take-Up, Market Summary, Planning Consent for 66 Hammersmith Road and the 2018 Office Annual Review.
MARKET SUMMARY – West London Office News Q4
West London office take-up in the London Borough of Hammersmith & Fulham in 2018 was 677,000 sq ft, nearly a third more than the total for 2017 (409,000 sq ft) and three times that of 2016 (201,000 sq ft).
In WHITE CITY
About half this take up (340,000 sq ft) has been at White City Place, the former BBC site, with 2 new tenants relocating there in Q4. Novatis, the global pharmaceutical group, took the 54,000 sq ft 2nd floor of Westworks and life sciences group GammaDelta took 12,000 sq ft of office and lab space on the part 4th floor, both at £50 per sq ft.
In HAMMERSMITH & FULHAM
Despite the high take-up, supply rose in Hammersmith & Fulham from 7.4% to 8.3% as 228,752 sq ft of offices went to market at The Big Red Workplace, 245 Hammersmith Road. This Legal & General and Mitsubishi Estate‘s scheme on the site formally occupied by Bechtel is due for practical completion in Spring 2019. In Hammersmith town-centre the co-working provider, Spaces, leased the 42,000 sq ft ground and 1st floor of the 5 floor Foundry office building at 77 Fulham Palace Road which is the middle building of AXA’s IM’s 114,500 sq ft Assembly London.
Also in Hammersmith a record sale price was achieved for an office building when a Dubai-based investor paid £16.8m (£1,140 per sq ft) for the 14,746 sq ft 202 Hammersmith Road that was let in Q4 2017 to Victoria Beckham for her HQ. This equates to a yield of 4.42%. Also in Q4, Patrizia UK, acquired the refurbished Coda Studios in Munster Road, Fulham for circa £39m (c. £570 per sq ft) from Columbia Threadneedle. This equates to an initial yield of c. 5.78%.
At Derwent’s Brunel Building the Premier League signed for 33,400 sq ft on two floors with Coach, a fashion company and Alpha FX, a foreign exchange company each taking a floor of 16,500 sq ft. This Fletcher Priest designed office building by the canal will be practically complete in Q1 2019. In Paddington Basin the Press Association took 17,000 sq ft at The Point.
In NOTTING HILL
Travel company, Selina, took the 4,500 sq ft former church, Hillgate House in Hillgate Street, W11 just south of Notting Hill Gate at a rent that equates to £56 per sq ft. What3Words took an additional 2,150 sq ft at Great Western Studios at £59.50 per sq ft giving them a total of 12,150 sq ft.
OTHER NEWS – West London Office
Similar to Crossrail, the Northern Line Extension has been delayed by a year. The extension at Nine Elms and Battersea Power Station from Kennington is now expected in 2021. Apple should be relocating after practical completion of the Power Station targeted for the end of 2021.
Q4 HEADLINES – WEST LONDON OFFICE NEWS
Planning Consent Granted for 66 Hammersmith Road
Planning consent was granted to Quadrant Estates and Pirbright Holdings for the demolition of the 50,000 sq ft 1980’s development, the Kensington Centre and the construction of a brand new 223,000 sq ft 8 floor, office-led mixed-use development opposite Charlotte Terrace near Olympia this quarter.
The Kensington Centre was constructed on part of the site of Cadby Hall, the former J Lyons & Co factory which used to stretch from Lyons Way next to Olympia all the way to Brook Green.
The design includes a new tree-lined frontage to Hammersmith Road, green living walls on the western facade, roof garden and 310 cycle bays with associated showers.
Q1 – West London Office – Annual Review
Office take-up doubled in London Borough of Hammersmith & Fulham (LBH&F) in Q1 and there were early signs that the office rental market was continuing despite Brexit-induced uncertainty. Supply increased as the 275,000 sq ft 2 Television Centre was launched and therefore rents fell at some of the older local office buildings from £50 to a range of £40-£47.50 per sq ft.
The largest ever letting took place in Notting Hill Gate in RBK&C when Frost Meadowcroft client, Frogmore, pre-let the 41,000 sq ft new offices for 92-94 Notting Hill Gate. The Squires Architects designed building at the junction of Pembridge Road was pre-let to The Office Group.
A large number of Hammersmith and Fulham investments were sold in the quarter including Thames Wharf Studios, The Aircraft Factory, 12 Hammersmith Grove, 227 Shepherds Bush Road and 401 King Street as investors shrugged off the Brexit concerns of the last 2 quarters of 2016.
Q2 West London Office – Annual Review
Office take-up in LBH&F was at 241,000 sq ft due to the large 215,000 sq ft letting of 2 Television Centre to Publicis, the French multi-national advertising company. This took supply in the Borough to 7.5% from its peak in Q2 2016 of 14.5% availability.
In Paddington, Sony Pictures signed a pre-let of 77,000 sq ft at approx £75 per sq ft. In Notting Hill, What3Words signed for 10,000 sq ft at the new 4th floor of Great Western Studios which is located between the Grand Union Canal and The Westway.
Q3 West London Office – Annual Review
Pernod Ricard signed for a huge 85,000 sq ft chunk of Building 7, Chiswick Park that reduced supply from 11.3% to 9.3% in Chiswick.
In Notting Hill Frogmore secured their second letting at Notting Hill Gate, with Ovo Energy signing for 21,000 sq ft on a pre-let at £65 per sq ft. In Hammersmith town centre Frost Meadowcroft client, Kier, secured tenants for the top three floors of their new building, Kings House; Sail GP (a yacht racing team supported by Oracle founder Larry Ellison), 4c Associates and Zaizi. To the North at White City Biotech company Autolus signed for 33,000 sq ft at Stanhope, AIMCo and Mitsui’s West Works
for c £50 per sq ft.
Q4 West London Office – Annual Review
Office investment sales in Hammersmith were over £700m in 2018 making it the 10th highest of all UK submarkets and the highest in London outside of the central London submarkets.
Office take-up in the London Borough of Hammersmith & Fulham was 677,000 sq ft in 2018, nearly a third more than the total for 2017 (409,000 sq ft) and treble that of 2016 (201,000 sq ft). Half this take up (340,000 sq ft) has been at White City Place, the former BBC site.
Despite the high take-up, supply rose in Hammersmith & Fulham from 7.6% to 8.3% availability as 228,752 sq ft of offices went to the market at The Big Red Workplace, 245 Hammersmith Road. Supply fell in the other west of West End markets of Paddington, RBK&C, Chiswick and Wandsworth.