| Agile working to redefine return to office life
Despite the tightening of coronavirus restrictions in England with the introduction of the so called 'rule of six', the government is still pushing for employees to get back to the office in a bid to aid the UK's economic recovery. But as Carl Whayman, Chief Executive of property management specialist Lee Baron, points out in a guest article this week, there's no one-size-fits all solution for UK businesses.
Whayman believes that 'agile working' is here to stay and a full return to pre-lockdown office life is unlikely. Long-term remote working, 'hub and spoke', or hybrid models are all now viable options for many companies, says Whayman, who also points out that there will be winners and losers as businesses reassess their office strategies. While local or suburban shops and support providers may benefit from a more decentralised approach, major city centres across the country are likely to fare less well, hit with a double whammy of fewer city centre employees and the continuing growth of online retail at the expense of High Street shopping.
London seems to be weathering the Covid-19 storm fairly well though, according to new research from Knight Frank, which ranks the UK capital as No1 for office investment in the first half of the year. "London (GBP3.2 billion) has emerged as the world’s number one cross-border office investment hotspot during the first six months of the year, firmly positioning itself as the global capital of capital," says Faisal Durrani, Head of London Commercial Research at Knight Frank. "Were it not for lingering global travel restrictions, the figure would have likely been a lot higher. London ranked ahead of Paris (GBP2.8 billion) and Manhattan (GBP1.7 billion)."
Singapore property developer and investor Sun Venture clearly sees the capital's appeal having recently completed the acquisition of its first London property, One New Oxford Street – a 110,000 sq ft Grade A office and retail development located between Tottenham Court Road and Holborn tube stations. UK REIT McKay Securities meanwhile, has been dealmaking too, in London, completing the sale of its long leasehold interest in 30 Lombard Street, a prime office building located in the heart of the City of London, to a German institutional fund.
We also report on another City acquisition, this time by Luxembourg-based asset and investment specialist REInvest Asset Management, which has acquired 30 Lombard Street for its DEREIF SICAV-FIS fund. The deal fits with a trend highlighted in a new report from Savills which identifies European investors as the most active of the non-domestic investor groups active in London in H1 2020.
"A constricted office market and conservative development pipeline looks attractive and prime yields on city centre office assets (circa 4 per cent) offer a considerable discount to similar assets in Frankfurt, Munich and Paris (circa 2-3 per cent)," says Oliver Bamber, director in the Central London investment team at Savills.
And finally, we switch from London to Paris with news of two property deals in the French capital. La Française Real Estate Managers has acquired a prime office asset in the city's CBD, while Allianz Real Estate has added two office buildings, which form part of the city's landmark CityLights office complex, to its portfolio.
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