West London Office Market
A plaque was unveiled for Island Records at Island Studios, St. Peters Square. The event was organised by the Nubian Jak Community Trust along with H&F Council. The building is now home to Lifschutz Davidson Sandilands architects & Frost Meadowcroft.
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Welcome to West London Office Market Q3 update of 2022, with an up-to-date view of the commercial property market in West London Featured in this issue: Market Summary, Take-Up, Q3 Headlines, Karma Kitchen’s Acton purchase, Investment & Planning and more…
SUPPLY & TAKE UP – West London Office Market
Results of the Q3 2022 RICS UK Commercial Property Survey point to a clear weakening in market activity. On the occupier side, reported overall tenant demand fell. The decline ends 5 successive quarters of growth, with virtually all parts of the UK seeing a downward trend for tenant demand in office and retail space. “90% of respondents” expect businesses to scale back some of their office footprint over the next year.
Prime office rents are predicted to remain broadly flat over the year ahead, as opposed to the increase previously predicted. The outlook is more negative for the secondary, non-prime, office market. Meanwhile, in the flex market IWG reports 25% higher Q3 revenues as a result of an increasing move to hybrid working and the increasing effects of economic uncertainty.
In Q3 the investment market survey reported a decline in buyer enquiries, representing the weakest return since Q2 2020. For secondary offices in London, close to 60% of respondents are predicting a value decline and over 80% of respondents now believe that the market is in some stage of a downturn.
The 12-month outlook shifted markedly for capital values. Projections for prime office values turned negative, with the net balance falling to -21% from +15% last quarter.
Tarrant Parsons, RICS Economist, said in a statement: “Deteriorating conditions in the UK economy, higher interest rates, and the prospect of more to come, are now clearly weighing on investor demand”
In Putney the Assembly Rooms sold to an undisclosed overseas investor in August for approx. £31 million with a net yield of 4.5%.
Read more in Investment & Planning…
KENSINGTON & CHELSEA
The highlight deal in Kensington & Chelsea was in Knightsbridge 23,500 sq ft in Hoopers Court part of the Knightsbridge Estate, let to Investindustrial, one of Europe’s leading independent investment groups at a rent of £89.50 per sq ft.
In Kensington OCL Ltd took 4,460 sq ft at £35.00 per sq ft in the Universal Building W14.
In Olympia, Yoo Capital secured a pre-let of 62,000 sq ft at One Olympia to Alpha Plus, the UK’s second largest private education business.
In Acton the co-working kitchen guru: Karma Kitchens finalised the purchase of 31 Coville Road in total 20, 585 sq ft for £4.825 million.
Read more in Headlines…
In Paddington rents remain at a healthy market value. At 50 Eastbourne Terrace, St James Place have taken 9,900 sq ft on the 5th floor at a rent in the late £80s, this follows an earlier letting on the 1st floor to another occupier at £79.50. Also 10 Eastbourne Terrace of 4,483 sq ft at £65 per sq ft.
WHITE CITY & NOTTING HILL
At the Notting Dale Campus W11 in Notting Hill, Adena Property have had a good quarter with the George Building 4th floor letting to FXWL Ltd of 5,638 sq ft at £44 per sq ft and at The Studio Building a letting of part 3rd floor 3,229 sq ft to Polestar at £40 per sq ft.
Also in The Yellow Building LMax Group a global financial tech company took 7,191 sq ft at C. £45 per sq ft.
In White City at WestWorks, two significant deals were secured. Gravity Media took 29,120 sq ft at £57.50 per sq ft and ME+EM, the luxury fashion label, took 14,000 sq ft in the same building, moving from Notting Dale.
On the riverside in Hammersmith Thames Wharf Studios agreed a 10 year lease for 7,249 sq ft at £59.50 per sq ft to Science UK Limited. The iconic riverside office scheme is still demanding some of the highest rents in Hammersmith.
Kings House, Hammersmith Road let 2,949 sq ft for £50 per sq ft to Safilo UK Ltd, an Italian eyewear designer/manufacturer, with current designer wear by David Beckham, Jimmy Choo and Boss.
IMPERIAL COLLEGE AND YOO CAPITAL
PARTNER FOR SHEPHERD’S BUSH MARKET LIFE SCIENCES INCUBATOR
West London Office Market
A new partnership with Yoo Capital and Imperial College sets out the plan for a Life Science Incubator on the Old Laundry Yard site and is set to be the largest of its kind in London, providing lab space and the infrastructure for local start-up enterprises to grow. This responds to an increasing demand for more purpose built incubator labs and the take up we have aready seen in White City and Imperial’s Scale Space development. The Market is one of the area’s best known features with a unique character known for its tradition and diversity. Yoo Capital has committed to support and invest in the Market and its traders to retain the much loved sense of community and diversity.
COMMERCIAL KITCHEN PROVIDER
PURCHASE PREMISES IN ACTON
31 Coville Road SALE Acton Karma Kitchen is transforming industrial spaces into beautiful commercial kitchens, co-working and storage.
Karma Kitchen build, equip and manage the spaces with everything from kitchen porters and community managers to top of the range equipment. The goal is to provide workspace that encompasses the full needs of a food & drink business. Frost Meadowcroft originally acquired the property for CityFleet in 2019.
THE ASSEMBLY ROOMS
1 WERTER ROAD , PUTNEY SW15
In August, Thackeray Group sold The Assembly Rooms on Putney High Street which comprises 26,321 sq ft for £31 million to an undisclosed overseas investor with a net yield of 4.5%. This immediately followed on from Frost Meadowcroft & BNP Paribas fully letting the scheme in March (as reported in our last Q1 & Q2 Market Update) to Gallagher Ltd on a 10 year lease at a record Putney rent of £52 per sq ft.
HAMMERSMITH BRIDGE W6
Foster + Partners has submitted plans for a temporary double-decker structure. Hammersmith & Fulham Council is moving ahead with plans to turn Hammersmith Bridge into a double-decker structure whilst it is being restored. The first phase of fixing the bridge is underway at a cost of £8.9 million.
The full restoration is expected to cost around £130 million with plans to introduce a toll gate on the bridge once it reopens to traffic.
77 FULHAM PALACE ROAD W6
AXA is selling Assembly London in Hammersmith for £120 million. A 3 acre with 225,000 sq ft across four buildings, this development saw the main
Foundry Building redeveloped in 2017 with recent tenants including FitFlop, IWG’s Spaces, and Tinopolis. The development is not yet fully let with a third of
the floor space vacant. The price equates to a capital value of £532 per sq ft and a net initial yield of 7.55% after vendor’s rent top up.