Demand for central London offices has edged up new figures show, as property giant Landsec became the latest firm to make a fresh bet on employers upgrading to more ‘green’ workspaces.
Proposals lodged by the FTSE 100 firm for a approximately £500 million office-led development at 55 Old Broad Street, a two minute walk from Liverpool Street station, went live on the City of London’s planning portal this week.
Investment comes despite a flurry of challenges landlords face as some tenants take longer to agree leases and look to shed space as they embrace hybrid working and staff only being in for part of the week.
A Knight Frank survey found 50% of large firms, those with over 50,000 employees, expect some reduction of office space in their global portfolio.
But a number of developers think would-be occupiers will sign for well-located modern buildings with a ‘green’ focus as businesses look at their environmental, social and governance (ESG) credentials.
New data from real estate consultancy JLL said there was 9.9 million square feet of active central London office demand in May. That was up 3% from a month earlier and 11% higher than the long-term average.It added that space under offer rose marginally over May.
Chris Valentine, JLL’s head of central London office agency said: “Following a muted first quarter, we’re starting to see an uptick of occupiers in search of best-in-class buildings in prime locations.”
Landsec’s Fletcher Priest-designed plans comprise a 23-storey tower with 360,000 square feet of offices and 3,500 square feet of retail space.
The office element will provide new low carbon workspace, designed and constructed using sustainable methods, including retaining some of the existing building, and reusing materials already on-site where possible.
Marcus Geddes, managing director, central London at Landsec told the Evening Standard: “The best of the London office market continues to grow...Old Broad Street is a perfect example of our confidence in the market’s strength.”
Property companies that have recently secured consent for office developments include Great Portland Estates at Minerva House near Borough market.
The green light has also been given for the next stage of a wider project in Bloomsbury by a fund managed by Tristan Capital Partners. The latest £150 million phase includes refurbishment works at Sicilian Avenue, London’s first historic pedestrianised high street, near Holborn station. There will be some 55,000 square feet of revamped offices and 10,000 square feet of retail space.
James Brodie, managing director portfolio and asset management at Tristan said: “These plans come at a time when businesses are looking for well-connected destinations and ESG-accredited spaces.”
