As the London office
market has slowed, the major City developers are looking at alternative sectors
for investment which could create some promising new construction
opportunities.
New housebuilding
and build-to-rent, serviced work space and office refurbishment are among the
sectors which property companies are pursuing.
Grosvenor Group, the
privately-owned property group best-known for owning much of Mayfair and
Belgravia, has recently announced plans to triple the size of its strategic
land business and create a portfolio of at least 30,000 homes over the next
five years. The group says it aims to be a market leader in large scale
communities, which offer high quality urban designs.
Grosvenor plans to
take sites of 2,000-5,000+ homes through planning and design and build them in
areas with buoyant local economies where new homes are in short supply. To this
end, it has expanded its homes pipeline to 9,300 from 2,100 last summer. The
group is developing a scheme of 1200 homes at Trumpington Meadows in Cambs and
has recently appointed Redrow Homes to deliver a development of 900 homes at
Barton Park near Oxford, which will be one of 10 NHS healthy new towns.
Grosvenor is also
progressing a huge £500 million investment involving the construction of some
1,500 rental homes on the site of a former biscuit factory in Bermondsey,
together with a school, new offices and public places.
Meanwhile, the
City’s confidence in the potential for the rented homes sector is reflected in
plans unveiled last month by investment group, Harwood Capital, to raise £175
million through a stock market float to set up a fund to invest in private
rented homes in UK regions.
The UK’s second
largest quoted property group, British Land is also looking at the ‘build to
rent’ sector, with potential developments in Ealing and Rotherhithe.
Having witnessed the
expansion of the serviced office sector, British Land has also set up a
thriving flexible office brand, Storey which it plans to extend to up 10 per
cent of its own office portfolio. Rather than letting space to serviced office
operators, other major quoted property groups such as Land Securities and Great
Portland Estates are also looking at developing their own flexible office
brands.
Great Portland
Estates recently pointed to encouraging early interest in its own fitted-out
flexible space, which offers simplified leases and terms starting from one
month. It has recently made its first letting of flexible space at Elm Yard,
WC1.
As well as creating
tender opportunities for fit-out contractors, the growth of serviced space will
reinforce construction prospects in the office refurbishment market. Here ,
Glenigan Construction data shows that detailed plans have recently been granted
and tenders recently returned on one of the City’s largest office refurbishment
projects, Stanhope’s £50 million construction project involving
alternations/extensions 31 Gresham Street (Glenigan Project ID:
17239967). Work is set to start in the new year.
Glenigan
Construction data shows that tenders have also recently been returned on a £4
million office refurbishment for a British Land scheme at 19 Liverpool Street
in the City where work is set to start in Spring 2019 (Glenigan Project ID:
18255913).
