From significant foreign investments in London office space to the current UK mortgage rate driving record rent prices, this monthly real estate news roundup includes the most compelling stories from across the real estate sector chosen by the BRE team.
We’ve placed the articles in three categories to explore the latest market movement, interest themes and notable transactions.
The UK market continues to witness strong demand from overseas investors, particularly in the realm of office leasing, highlighting the UK’s allure as an investment destination. This sustained overseas demand underscores the confidence and interest in the UK market’s potential for growth and profitabilit
Salesforce targets £3.14bn investment drive in the UK
Salesforce plans to invest £3,14bn in its UK business over the next five years to drive innovation, support its growing customer base and drive new business revenues, reflecting huge confidence in the British economy. (The Times)
Savills reports positive growth in West End market activity with £900 million in investment volumes during Q2
The robust expansion of the West End market, including 25 completed deals and £900 million in investment volumes during Q2, reflects confidence in Central London. (React News)
Greystar doubles size of London HQ
Greystar will relocate from its current base at 15 Finsbury Circus to The Gilbert, securing nearly 30,000 sq ft of premium office space amid company expansion. (React News)
Office rents rise by 7.4% in key European business districts
Office space costs in Europe’s central business districts have increased by an average of 7.4 per cent since the onset of the pandemic, with London’s West End leading the way in rental growth. (React News)
The market is experiencing a surge in demand for world-class amenities and office fit-outs as businesses seek quality, well-located office space investment opportunities in the city. Additionally, the demand for residential rental properties remains strong across London and the UK due to factors such as undersupply, increasing mortgage rates, and an unaffordable buyers’ market, driving tenants towards renting rather than purchasing properties.
OpenAI sets sight on London for first international office
ChatGPT creator OpenAI has chosen London for its first international office, highlighting confidence in the UK’s AI sector. The company cites the city’s “vibrant technology ecosystem” and “exceptional talent” as motivations. (The Times)
“Super prime” office segments on the cards for London
Central London has seen a rise in the “super prime” office segment, evidenced by 37 deals transacted at £100 per sq ft or higher in Q1 2023. The significant demand for premium fit-outs points towards the emergence of a sought-after super prime office space category. (React News)
Inflation continues to undermine the housing market and further restrict supply
Rising mortgage rates exacerbate the impact of inflation on the UK housing market, posing financial challenges for buyers. (Financial Times)
UK mortgage rate crisis driving record rent squeeze
Record rent increases in the UK are impacting millions of renters as landlords transfer higher mortgage costs to tenants. (The Guardian)
Urban Logistics reports growth despite economic uncertainty
Urban Logistics REIT demonstrates growth despite challenging market conditions, with a notable 45 per cent increase in net rental income in its latest annual results. (React News)
Despite wider economic uncertainty, London’s office market is experiencing robust demand for premium spaces with plans for impressive new developments signifying confidence in the sector. Overseas equity, particularly from the US, Europe and Asia, continues to flow into the UK, driving investments in both office and logistics segments. These trends underline investor interest and ongoing growth opportunities in London’s commercial real estate landscape.
Clarion returns to UK market with warehouse acquisition
Logistics specialist Clarion has made a strong comeback to the UK market, acquiring three warehouses in Gorsey Point, Widnes to expand its operations in the sector. (React News)
Hong Kong and UK developers commit to central London with 3.3m sq ft office tower proposals
Three significant office proposals, totalling 3.3 million sq ft, continue to advance in the planning system despite market challenges, suggesting strong confidence in London and the leasing market. (React News)
Kajima completes £45m Soho office development acquisition
Kajima has acquired 27 Soho Square in London’s West End, with future plans to convert the first to seventh floors into 21 luxury flats, as permitted by existing planning permission. (React News)
Jastar Capital acquires historic Custom House in City for over £200m
Hotel group Jastar Capital has acquired the historic Thameside Custom House for a sum exceeding £200 million, with plans to develop it into a luxury hotel. (React News)
HSBC to relocate global headquarters from Canary Wharf to small City location
HSBC is poised to shift its global HQ from Canary Wharf but will remain in the City at a small central location, as the company downsizes office space due to remote work. (Financial Times)
Hines acquires large value-add Soho block in ESG drive
Representing HEVF 3, Hines has acquired Film House in Soho, London, to provide quality space that boasts excellent ESG credentials for tenants. (React News)
For further information about any of the insights shared above or to find out more about Bedrock’s Real Estate services, please do reach out: info@bedrockgroup.ch
Author: David Djanogly, Director of Real Estate
This month's news round-up looks at a positive few weeks for UK real estate, with strong activity across the office, retail and logistics sectors, while continued rental rises offer more encouragement for investors.
In July's news round-up, we're focusing on the positive activity in the central London office market as a surge in demand for leasings and strong interest from investors help give the sector a boost.
In June's news round-up, we look at some of the major trends and transactions that are helping demonstrate growing positivity for the London office market and why this is creating new opportunities for investors.