What was The Buzz in March?
Our monthly roundup of real estate industry news.
Here are a few of the stories that caught our attention in March. From a new coworking spot in Liverpool Street and mixed use scheme in Spitalfields, to the UK’s largest pre-let development loan since the beginning of 2023, there’s some exciting new places and spaces joining the London commercial real estate landscape.
JLL report reveals tipping point for low-carbon buildings demand in sight
The real estate landscape is undergoing a profound transformation as sustainability takes centre stage. In a report titled “The Green Tipping Point” by JLL, key findings shed light on the imminent impact of sustainability in real estate. Is 2024 the year when carbon commitments change lease markets at scale?
According to JLL’s report, the effects of carbon commitments are set to materialize in lease markets within the next 12 to 24 months. This impending shift will mark a tipping point where investments in low carbon buildings will begin to pay dividends. Tenants are increasingly prioritizing energy-efficient, clean energy-powered spaces, reflecting a strategic imperative for corporate occupiers. Investors who seize this moment stand to benefit by communicating measurable progress in a building’s carbon performance.
Despite growing demand for sustainable office spaces, the supply of low carbon buildings is struggling to meet expectations. JLL’s research indicates that without increased levels of retrofitting, the gap between demand and supply will widen significantly. By 2025, approximately 30% of the demand for low carbon space may remain unmet, with the potential gap exceeding 70% by 2030. This underscores the urgent need for concerted efforts to accelerate the transition to sustainable real estate solutions. Read more.
AXA IM Alts secures £480 million development loan for landmark net-zero London office scheme, 50 Fenchurch Street
AXA IM Alts has secured a £480 million construction loan from Cale Street, the real estate investment and finance firm, to fund the development of its 650,000 sq ft next generation office building at 50 Fenchurch Street. This transaction represents one of the largest development loans agreed ahead of any pre-let in the UK since the beginning of 2023.
Following the acquisition of the site by AXA IM Alts on behalf of clients in 2022, the 6-year facility will fund the delivery of the 36-storey building. With demolition and enabling works substantially progressed, construction is expected to commence this year, following the appointment of a main contractor. YardNine are acting as delivery partner for the project.
Designed to reflect evolving occupier requirements, the building will incorporate flexible grade-A office space coupled with state-of-the-art technology. 50 Fenchurch Street will also offer facilities and amenities which enhance occupiers’ experience and aim to improve the health and wellbeing of people working in the building, which, in turn aids productivity. The development project includes the retention of two historic listed buildings, the Tower of All Hallows Staining and Lambe’s Chapel Crypt, which will be relocated within the scheme to form part of an extensive new public realm.
Sustainability and wellbeing are a key focus for the building, incorporating abundant vertical urban greening designed to enhance the workplace environment, biodiversity and air quality. Utilising all electric energy and consuming 50% less energy than a typical office tower, the scheme is targeting BREEAM Outstanding and net zero in operation, whilst also adopting the latest innovations to reduce embodied carbon during construction.
Occupiers and visitors will benefit from over 1.5 acres of outdoor space and terraces, with balconies on the majority of levels, including public gardens on Level 10 which will provide river views over the Tower of London and Tower Bridge. 50 Fenchurch benefits from exceptional connectivity, being served by eight tube and mainline stations within an eight-minute walk from the site.
Rob Samuel, UK Head of Development at AXA IM Alts, commented: “The divergence in the London office market between prime well connected, sustainable, amenity-rich spaces and poorer quality buildings continues apace, with a supply-demand imbalance in favour of the former. Cale Street’s support for this BREEAM Outstanding development is a strong endorsement of our approach at 50 Fenchurch Street, where we will deliver a landmark, next generation office into the heavily supply constrained City of London market.” Read more.
Huckletree opens its doors in Liverpool Street
Huckletree Liverpool Street opend on 2nd April 2024, introducing 35,000 sq. ft of ready-to-use office space along with versatile hotdesking solutions to the local area. This launch is a key component of Huckletree’s broader strategy for sustainable growth, aiming to extend its presence to over 300,000 sq. ft across the UK and Ireland within the forthcoming year.
In response to the escalating trend of hybrid working models and the growing demand for adaptable workspaces, numerous businesses are transitioning towards contemporary work environments like Huckletree, which present efficient alternatives to conventional offices. The Liverpool Street site has been meticulously crafted to accommodate modern working practices, featuring an array of advanced facilities such as a member’s lounge, rooftop terrace, a barista bar, and a podcast studio.
Gabriela Hersham, Co-Founder and CEO of Huckletree adds: “We are passionate about creating spaces where people look forward to coming to work, which we believe is a key component of workspace selection for today’s reality. The new hub in Liverpool Street is designed to brighten up the work day. Our bold, award-winning design features throughout the space, with a playful colour palette designed to enhance creativity and give a healthy boost of dopamine.”
Since opening its first workspace in 2014, Huckletree has achieved remarkable results by providing innovation-led companies with the right environment and network to foster growth and connectivity. Their unique approach has been key to their incredible success over the past decade. Members of all Huckletree spaces have access to tailored support and events designed to support professional and personal growth. With a growing community of now 75+ global ambassadors, 100+ venture partners, 4,500+ members and 1,500+ alumni; the Huckletree ecosystem sets the business apart, and goes beyond being just a physical office space.
Hersham adds: “We’ve worked hard over the past 10 years to become one of the leading workspace providers in the UK and Ireland and have done that in a creative way. Being part of the Huckletree community means being at the epicentre of innovation and growth. For us, networking doesn’t just mean sharing a communal coffee machine. It means being part of a dynamic ecosystem where people learn from each other every day.” Read more.
British Land’s Norton Folgate scheme “almost 50% let” after trio of signings
British Land has signed its second office tenant and two restaurants, at its historic £225 million Norton Folgate regeneration scheme on the edge of the City in Spitalfields. The deals means that the 335,000 sq ft mixed use development – a mix of six Georgian, Victorian and new buildings around a cobbled courtyard – is almost 50% let.
The latest signings are for Swiss sportswear brand On, which has taken 20,000 sq ft of office space in the Loom Court building, Sri Lankan restaurant Kolamba East, which will occupy 2,700 sq ft on the ground floor of 16 Blossom Street, and Chinese dumpling specialist Xi Home, which is taking 1,650 sq ft on Blossom Steet.
David Lockyer, head of development at British Land, said: “Norton Folgate sets new standards for retrofit, refurbishment and redevelopment in Central London. At a time when businesses want to focus on their brand and culture, Norton Folgate supports everything a modern business wants with a combination of buildings with historic character, impressive sustainability credentials and a vibrant environment. This creates an unparalleled platform for modern businesses to thrive and gives businesses a very special identity. These new lettings reflect Norton Folgate’s appeal as a well-located, high quality destination for dining, work and leisure.” Read more.
Free Space Fridays: Could you offer a meeting space for charities?
The London Society is launching a matching service for socially responsible companies who have extra office capacity, with charities who need valuable meeting space to hold key, in real life meetings. They are calling it FREE SPACE FRIDAYS.
For many companies in London, Fridays are one of the most popular days for employees to work from home, leaving their offices open and operational, but with unused capacity and unused meeting rooms. The decline of office workers in London is a concern for the economy, particularly the hospitality sector and has led to the Mayor of London scrapping peak tube fares on Fridays for three months, starting in March.
The London Society believes that there is another way to boost the Friday ‘work’ economy in London. Many charities, social enterprises and not-for-profit groups have no ‘head office’ but they really need quality space to host their regular governance meetings or strategy sessions. Wouldn’t it be great for London if all the empty meeting rooms were put to good use by community groups who really need it for their formal meetings? Read more.
