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Evening Standard

West End businesses band together to fight soaring Chinatown rents

By JOANNA BOURKE

Around 40 businesses in London’s West End have formed an alliance to fight soaring rents in Chinatown where parts of the area will undergo a makeover.

West End (Chinatown) Tenants’ Association has been launched in response to concerns that restaurants and retailers are being priced out of the area.

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It comes around the same time as the architects that helped transform King’s Cross from seedy to suave unveiled images of their vision for tidying-up Chinatown.

The formation comes after local restaurant owner Jon Man in March sounded the alarm that Chinatown could disappear in five years as businesses feel the pinch of property costs.

He said: “We will stand up for all them [independent businesses], to create a level playing field with landlords which will result in protecting the identity and character of the internationally renowned West End.”

The group has hired DeVono Property to help thrash out better rental deals with landlords.

“We would expect to shave up to 15% off what property owners are quoting, and therefore help those that in some cases have been subject to landlords trying to hike rents beyond sustainable levels,” said Philip Sandzer, head of retail at DeVono Property.

Chinatown is one of a number of markets in London that has caught the attention of building owners wanting to capitalise on the arrival of Crossrail in 2018 which will boost tourists and shoppers spending in the West End.

Landlord Shaftesbury submitted plans to Westminster city council to redevelop the Newport Sandringham building which it snapped up the commercial parts of in March last year for £54.4million.

The prominent block with fronts on Charing Cross Road and Newport Place will be revamped by architects Buckley Gray Yeoman.

It will reconfigure small, narrow and cluttered space, with 13,500 square feet of restaurants and 32,000 square feet of shops.

Brian Bickell, chief executive of Shaftesbury said: “If approved our plans will bring long-term benefits for local businesses and visitors to the area ahead of the arrival of Crossrail in late 2018”.

The plans were welcomed by Hugh Radford, executive director in property agent CBRE’s retail team who said he expects Shaftesbury “to retain an eclectic retailer mix”.

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Evening Standard

Space race forces restaurants setting course for London into a waiting game

By Oscar Williams-Grut

London’s booming restaurant scene and the rapid expansion of a cluster of High Street chains are keeping overseas rivals waiting for up to a year for space in the capital.

International and UK restaurants looking to break into the capital are struggling because demand for retail and leisure space has outstripped availability, according to commercial agent DeVono Property.

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Philip Sandzer, director retail and leisure, said: “We’re now in a position where we’re having to advise new restaurant brands that they may have to wait up to a year to find suitable leisure premises.

“The lack of availability is partly down to the expansion, in the past five years, of a number of hugely successful restaurant brands such as Côte, Bill’s and Byron.”

DeVono has acquired sites for 20 restaurant brands this year and is looking for space for 50 others. It has been contacted by 300 restaurants wanting to open in London this year, up 30% on 2013.

By Oscar Williams-Grut
London’s booming restaurant scene and the rapid expansion of a cluster of High Street chains are keeping overseas rivals waiting for up to a year for space in the capital.
International and UK restaurants looking to break into the capital are struggling because demand for retail and leisure space has outstripped availability, according to commercial agent DeVono Property.
Philip Sandzer, director retail and leisure, said: “We’re now in a position where we’re having to advise new restaurant brands that they may have to wait up to a year to find suitable leisure premises.
“The lack of availability is partly down to the expansion, in the past five years, of a number of hugely successful restaurant brands such as Côte, Bill’s and Byron.”
DeVono has acquired sites for 20 restaurant brands this year and is looking for space for 50 others. It has been contacted by 300 restaurants wanting to open in London this year, up 30% on
2013.

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Evening Standard

King's Cross rents take off in space race

By Oscar Williams-Grut and Russell Lynch
Office rents in King’s Cross are surging thanks to a space race among pharma and tech companies to relocate to the area.
Commercial rents surged by 15.45%, according to DeVono Property, the biggest quarterly jump recorded in any London area so far this year.
Technology, pharmaceutical and science businesses are fighting to take space, which is undergoing substantial redevelopment. The fast links to Cambridge, a key research hub, and the opening next year of the Francis Crick Institute, a medical research centre, have proved to be a major draw.
MSD, the UK subsidiary of Merck & Co, has taken space at 2 Pancras Square; Intercept Pharmaceuticals is also on the cusp of taking space in the same building.
Technology businesses are also being attracted by the imminent arrival of Google, which is planning to move its entire London workforce into a new £1 billion development in King’s Cross, and Facebook, which has also taken space in the area.

By Oscar Williams-Grut and Russell Lynch

Office rents in King’s Cross are surging thanks to a space race among pharma and tech companies to relocate to the area.

Read more

Commercial rents surged by 15.45%, according to DeVono Property, the biggest quarterly jump recorded in any London area so far this year.

Technology, pharmaceutical and science businesses are fighting to take space, which is undergoing substantial redevelopment. The fast links to Cambridge, a key research hub, and the opening next year of the Francis Crick Institute, a medical research centre, have proved to be a major draw.

MSD, the UK subsidiary of Merck & Co, has taken space at 2 Pancras Square; Intercept Pharmaceuticals is also on the cusp of taking space in the same building.

Technology businesses are also being attracted by the imminent arrival of Google, which is planning to move its entire London workforce into a new £1 billion development in King’s Cross, and Facebook, which has also taken space in the area.

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Evening Standard

Get me out! How to break out of an office contract before the time’s up

By Adam Landau
One of the largest costs for SMEs is related to their property costs. The monthly rent, service charges, taxes and fixed-period contract lengths make the commitment onerous to businesses.
Specifically, ending contracts prematurely is expensive. Few SMEs hold surplus cash for this eventuality. They have to answer to landlords, their agents, and the binding contracts set in place. What if there was a way to minimise this exposure to the penalties involved?
Here’s how to understand the process and cut costs:
Best advice on notifying landlords + agents
If your lease was negotiated via a property professional, there should be some break option clauses which could be activated at certain preset dates. Most breaks will incorporate a six month written notice period, advising your landlord of your wish to leave. Don’t miss these opportunities to reassess your office needs.
What to honour, irrespective
A contract is enforceable, so negotiating the terms in your favour, for any elements within your lease will protect you and your business. Any point not addressed within your lease will most likely work against you when you try and exit the property. Areas of confusion are often centered on the condition of the property when you hand it back to the landlord, which can be very costly. Think
ahead and think of the worst case scenario in all events.
Find a replacement!
If negotiated correctly, you should have the rights to leave your office early by finding an alternative occupier willing to take your lease via a sub-lease or transferring your lease. However, there are conditions set against these exit routes which need to be fulfilled, such as landlord’s approval of the new tenant in terms of their strength to keep up to date with their lease obligations as well as the financial elements that could differ from what the original lease offered. Getting this protocol wrong, will result in a landlord declining a replacement occupier, which would naturally be a waste of time and money in pursuit of your exit. Financial viability of a business is one of the most important aspects that all landlords will consider in these situations, so make sure your property advisor thinks ahead with these matters.
Why it all boils down to timing:
Timing is everything. Planning the disposal of your current office, while also lining up the completion of the lease for your new lease is a complicated process. Make sure you use the same Solicitor for both transactions as they will be able to coordinate this. Make sure there is a clear breakdown of expected timings within the Heads of Terms for both transactions and make sure your agent and Solicitor are keeping all parties in line with these on a weekly basis. Plan your interior changes that you require as soon as your Solicitor starts working on the lease. This also works in accordance to the new company taking over your lease as this is often a main cause of delay as no changes to the property can take place without landlords’ consent.
Avoid a conflict of interest: only use a tenant rep!
You are a commercial occupier, so it is vital that you are advised by property consultants that only ever act for occupiers. The aim of a tenant focused advisor is the exact opposite to that of a landlords and this will negate any conflict of interests that are very common within the commercial property sector.
Adam Landau is a Director of DeVono Property which represents tenants within the office, retail and leisure sectors in London and the UK.

By Adam Landau

One of the largest costs for SMEs is related to their property costs. The monthly rent, service charges, taxes and fixed-period contract lengths make the commitment onerous to businesses.

Read more

Specifically, ending contracts prematurely is expensive. Few SMEs hold surplus cash for this eventuality. They have to answer to landlords, their agents, and the binding contracts set in place. What if there was a way to minimise this exposure to the penalties involved?

Here’s how to understand the process and cut costs:

Best advice on notifying landlords + agents

If your lease was negotiated via a property professional, there should be some break option clauses which could be activated at certain preset dates. Most breaks will incorporate a six month written notice period, advising your landlord of your wish to leave. Don’t miss these opportunities to reassess your office needs.

What to honour, irrespective

A contract is enforceable, so negotiating the terms in your favour, for any elements within your lease will protect you and your business. Any point not addressed within your lease will most likely work against you when you try and exit the property. Areas of confusion are often centered on the condition of the property when you hand it back to the landlord, which can be very costly. Thinkahead and think of the worst case scenario in all events.

Find a replacement!

If negotiated correctly, you should have the rights to leave your office early by finding an alternative occupier willing to take your lease via a sub-lease or transferring your lease. However, there are conditions set against these exit routes which need to be fulfilled, such as landlord’s approval of the new tenant in terms of their strength to keep up to date with their lease obligations as well as the financial elements that could differ from what the original lease offered. Getting this protocol wrong, will result in a landlord declining a replacement occupier, which would naturally be a waste of time and money in pursuit of your exit. Financial viability of a business is one of the most important aspects that all landlords will consider in these situations, so make sure your property advisor thinks ahead with these matters.

Why it all boils down to timing:

Timing is everything. Planning the disposal of your current office, while also lining up the completion of the lease for your new lease is a complicated process. Make sure you use the same Solicitor for both transactions as they will be able to coordinate this. Make sure there is a clear breakdown of expected timings within the Heads of Terms for both transactions and make sure your agent and Solicitor are keeping all parties in line with these on a weekly basis. Plan your interior changes that you require as soon as your Solicitor starts working on the lease. This also works in accordance to the new company taking over your lease as this is often a main cause of delay as no changes to the property can take place without landlords’ consent.

Avoid a conflict of interest: only use a tenant rep!

You are a commercial occupier, so it is vital that you are advised by property consultants that only ever act for occupiers. The aim of a tenant focused advisor is the exact opposite to that of a landlords and this will negate any conflict of interests that are very common within the commercial property sector.

Adam Landau is a Director of DeVono Property which represents tenants within the office, retail and leisure sectors in London and the UK.

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Evening Standard

Building a better gender balance

By: Niki Chesworth
Most high-skilled jobs will go to women in the next six years, yet there are still male bastions such as building and construction where just one in six employees is female. 
There is a growing disparity between male and female skills levels. The proportion of men with a degree-level qualification is rising and is set to increase to 44 per cent by 2020 but the number of women educated to the same level is rising at a much faster rate. As a result by 2020 nearly half, 49 per cent of all women, will have a degree or equivalent. 
This should help address gender divides in highly-skilled jobs with last week’s report from the UK Commission for Employment and Skills (UKCES) predicting that women will take two-thirds of all highly skilled jobs created in the next six years. 
Yet there still remain several male bastions where women struggle to make up more than a minority of the workforce, with these sectors including engineering, construction and property. According to Women in Property (WiP), which champions young women to enter the industry, only 15 per cent of the property and construction workforce is female. 
The Royal Institution of Chartered Surveyors (RICS) is also pushing for greater diversity in the sector through its campaign Surveying the Future. In the construction side of the industry, where only 11 per cent of the workforce is female, it has warned companies, which employ 2.5 million people between them, that they need to “fool-proof” their growth plans by considering how to access the pipeline of “untapped” female talent. 
Progress is being made in chartered surveying. While only 13 per cent of chartered surveyors are women (compared to just three per cent in the 1980s), the next generation will have a much higher percentage of female recruits as 28 per cent of students and trainees today are women. 
Employers are also doing their part to bring about a wholesale culture change. The change the Skyline initiative was launched by Gardiner & Theobold to encourage young people and women to join the construction and property sector, while the members of the Changing the Face of Property Consortium including JLL, CBRE, Savills, Knight Frank and Cushman & Wakefield, are trying to attract people from more diverse backgrounds. 
Some employers are going further and actively promoting themselves as recruiters of women. For example, 60 per cent of employees at DeVono Property, which represents tenants looking for office space in London, are female. 
Director Kirsty MacGregor says that women should not be deterred from working in this male-dominated sector because they think it will not welcome them as many of the roles will appeal to female skill sets. 
She says that roles such as account management are “people-focused with an emphasis on building relationships” while project management will suit those who have “good management logistics and coordination skills”. Once again the role requires “close client interaction”. So many roles are very different to how most jobs in construction are perceived as being only for men in hard hats on a construction site. 
Time for change
DeVono managing director, Adam Landau, believe it is now time for change in commercial property, saying: “A particular work dynamic is created by women in our business which has proven to be a success – they now account for the larger balance of our workforce. Of course we have an equal opportunity job application process but, in our current expansion phase, have found some exceptional candidates who happen to be female.”

By Niki Chesworth

Most high-skilled jobs will go to women in the next six years, yet there are still male bastions such as building and construction where just one in six employees is female. 

Read more

There is a growing disparity between male and female skills levels. The proportion of men with a degree-level qualification is rising and is set to increase to 44 per cent by 2020 but the number of women educated to the same level is rising at a much faster rate. As a result by 2020 nearly half, 49 per cent of all women, will have a degree or equivalent. 

This should help address gender divides in highly-skilled jobs with last week’s report from the UK Commission for Employment and Skills (UKCES) predicting that women will take two-thirds of all highly skilled jobs created in the next six years. 

Yet there still remain several male bastions where women struggle to make up more than a minority of the workforce, with these sectors including engineering, construction and property. According to Women in Property (WiP), which champions young women to enter the industry, only 15 per cent of the property and construction workforce is female. 

The Royal Institution of Chartered Surveyors (RICS) is also pushing for greater diversity in the sector through its campaign Surveying the Future. In the construction side of the industry, where only 11 per cent of the workforce is female, it has warned companies, which employ 2.5 million people between them, that they need to “fool-proof” their growth plans by considering how to access the pipeline of “untapped” female talent. 

Progress is being made in chartered surveying. While only 13 per cent of chartered surveyors are women (compared to just three per cent in the 1980s), the next generation will have a much higher percentage of female recruits as 28 per cent of students and trainees today are women. 

Employers are also doing their part to bring about a wholesale culture change. The change the Skyline initiative was launched by Gardiner & Theobold to encourage young people and women to join the construction and property sector, while the members of the Changing the Face of Property Consortium including JLL, CBRE, Savills, Knight Frank and Cushman & Wakefield, are trying to attract people from more diverse backgrounds. 

Some employers are going further and actively promoting themselves as recruiters of women. For example, 60 per cent of employees at DeVono Property, which represents tenants looking for office space in London, are female. 

Director Kirsty MacGregor says that women should not be deterred from working in this male-dominated sector because they think it will not welcome them as many of the roles will appeal to female skill sets. 

She says that roles such as account management are “people-focused with an emphasis on building relationships” while project management will suit those who have “good management logistics and coordination skills”. Once again the role requires “close client interaction”. So many roles are very different to how most jobs in construction are perceived as being only for men in hard hats on a construction site. 

Time for change

DeVono managing director, Adam Landau, believe it is now time for change in commercial property, saying: “A particular work dynamic is created by women in our business which has proven to be a success – they now account for the larger balance of our workforce. Of course we have an equal opportunity job application process but, in our current expansion phase, have found some exceptional candidates who happen to be female.”

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Evening Standard

Election jitters hit moving plans

By Russell Lynch

Uncertainty over the next general election has prompted London businesses to shelve plans to move in increasing numbers, new figures showed today. 

DeVono Property, an agent acting on behalf of commercial tenants in the capital has seen a 20% drop in enquiries about new offices in the last quarter compared to a year earlier. 

Read more

Its survey of 300 clients, ranging from small businesses to FTSE 100 companies, found more than three-quarters blaming next year’s general election as the main reason for delaying or shelving moves. 

The latest survey comes after concerns over “political uncertainty” expressed by UK property firm British Land and more forcibly by the boss of developer Helical Bar Mike Slade, who has warned against the impact of Labour’s mansion tax and plans to cut rents. 

By Russell Lynch
Uncertainty over the next general election has prompted London businesses to shelve plans to move in increasing numbers, new figures showed today. 
DeVono Property, an agent acting on behalf of commercial tenants in the capital has seen a 20% drop in enquiries about new offices in the last quarter compared to a year earlier. 
Its survey of 300 clients, ranging from small businesses to FTSE 100 companies, found more than three-quarters blaming next year’s general election as the main reason for delaying or shelving moves. 
The latest survey comes after concerns over “political uncertainty” expressed by UK property firm British Land and more forcibly by the boss of developer Helical Bar Mike Slade, who has warned against the impact of Labour’s mansion tax and plans to cut rents. 

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Evening Standard

10 steps to negotiating the best office rental

With moving office ranking as one of the most stressful and expensive experiences for bosses, what are the steps overlooked and misunderstood when negotiating the contract? Office acquiring expert, Luke Philpott of DeVono Property explains 10 key steps to consider when negotiating an office deal.
1. Headline rent
The agreed rent (usually given as a per square foot per annum figure) that a party will pay to a landlord until the earlier of either review or lease end. Once agreed and part of an ongoing lease, this is then also referred to as the 'passing rent'.
2. Rent free periods or reduced rent provisions
Collectively termed 'inducements' or 'incentives', these are periods of time that can be negotiated with landlords, whereby a tenant will benefit from either not paying any rent, and/or from paying a lower rent than the agreed 'headline rent' for a period of time, to thus arrive at the 'net effective rent'.
3. Service charges
These are a given building's running and repairing costs, which a landlord will incur in providing and maintaining a commercial building that is fit for purpose. These costs are most usually reviewed annually and a landlord must not profit (but will also do all necessary to avoid loss) from the recovery of his building's running and repairing costs. Under a "Full Repairing and Insuring" (FRI) lease, which are the most commonly granted leases in the UK, a landlord is lawfully able to charge back in full to the building's tenants the costs of running and repairing his building via the service charge.
It's based upon the tenants' percentage of occupation across the building. Reputable landlords should adhere to the latest guidelines on service charges which are set out under the RICS service charge code of practice.
4. Lease length
The length of a lease is often the starting point in a negotiation and this is a point absolutely at the discretion of a landlord and subject to the agreement of a given tenant during lease negotiations. They can be of any required length and incorporate any required flexibility. They are largely market dependant, meaning that in a strong 'landlord's market', landlords will look to achieve longer leases with less flexibility than they can reasonably achieve in a strong tenant's market where tenants most often look for lease lengths that suit them - typically shorter and with greater flexibility.
5. Rent reviews and conditions / formulas surrounding these
In any UK commercial lease that extends longer than five years, a review of the headline rent will occur at the anniversary of the fifth year from the start of the lease. The review is actually based upon a hypothetical lease and the parameters and formulas that will play a part in determining the new rent are numerous.
6. Break options and conditions surrounding these options
Otherwise referred to as 'options to determine', these are usually found at some or all of the following lease-commencement anniversary dates; 3, 5, 10, 15, 20. They can be either 'tenant only', 'landlord only', 'rolling' or 'mutual' options to determine the existing lease. The conditions that must be met in order for a break option to be legally and effectively served by either party are numerous.
7. Alienation provisions and restrictions
This refers to a tenants' right to dispose of their lease to a third party via most usually, a subletting or some form of sharing in the event of the third party being an entity, subsidiary or affiliated company to that of the head lessee/ tenant.
8. Capital contributions from the landlord / lessor
There exist formulas in commercial real estate that whilst not bound by law, are bound by a long history of doing things in this way in relation to calculating certain capital contributions (such as special renovations / new fittings) due at the start of a new lease from landlords to tenants.
9. Rental deposits, covenant / deposit issues
The assessment of a potential tenant's (to a building) covenant strength is a crucial and often emotive part of any negotiation process. Once a tenant makes an offer for a building or office, they will be required to submit, where available, their most recent three years' of audited accounts to the landlord for review. There is a specific 'means test' that is employed to ascertain if a company's financial strength (or covenant) is robust enough for a deposit, or other form of surety to be deemed unnecessary.
10. Schedule of condition / dilapidations containment
It is possible in certain cases and scenarios to limit a tenant's repairing obligations (sometimes called 'dilapidations') at the expiry or earlier determination of their lease. This can drastically reduce the exit costs that a tenant would otherwise be liable for in relation to returning their office to the precise condition of repair that the office was in at the start of their lease. One way that a tenant may achieve this is by successfully negotiating with their prospective landlord the right to document, through words and photographs, the condition of the office at lease commencement - this is called a
Schedule of Condition and is then appended to the lease. With an average office lease in London averaging not less than a five-year fixed term, a simple overpayment of the financial terms agreed, will provide multiple years of additional costs to the tenant. Having an independent industry expert on-side who understands the office market conditions, and is not confused or influenced by what property agents acting for landlords provide as their comparable evidence to support the terms they are requesting, is vital for any business looking to agree the best possible lease terms. This becomes even more important in an office market in which rental values are increasing considerably.
Luke Philpott is director of DeVono Property which acquires offices for companies moving into and around London

With moving office ranking as one of the most stressful and expensive experiences for bosses, what are the steps overlooked and misunderstood when negotiating the contract? Office acquiring expert, Luke Philpott of DeVono Property explains 10 key steps to consider when negotiating an office deal.

1. Headline rent

Read more

The agreed rent (usually given as a per square foot per annum figure) that a party will pay to a landlord until the earlier of either review or lease end. Once agreed and part of an ongoing lease, this is then also referred to as the 'passing rent'.

2. Rent free periods or reduced rent provisions

Collectively termed 'inducements' or 'incentives', these are periods of time that can be negotiated with landlords, whereby a tenant will benefit from either not paying any rent, and/or from paying a lower rent than the agreed 'headline rent' for a period of time, to thus arrive at the 'net effective rent'.

3. Service charges

These are a given building's running and repairing costs, which a landlord will incur in providing and maintaining a commercial building that is fit for purpose. These costs are most usually reviewed annually and a landlord must not profit (but will also do all necessary to avoid loss) from the recovery of his building's running and repairing costs. Under a "Full Repairing and Insuring" (FRI) lease, which are the most commonly granted leases in the UK, a landlord is lawfully able to charge back in full to the building's tenants the costs of running and repairing his building via the service charge.
It's based upon the tenants' percentage of occupation across the building. Reputable landlords should adhere to the latest guidelines on service charges which are set out under the RICS service charge code of practice.

4. Lease length

The length of a lease is often the starting point in a negotiation and this is a point absolutely at the discretion of a landlord and subject to the agreement of a given tenant during lease negotiations. They can be of any required length and incorporate any required flexibility. They are largely market dependant, meaning that in a strong 'landlord's market', landlords will look to achieve longer leases with less flexibility than they can reasonably achieve in a strong tenant's market where tenants most often look for lease lengths that suit them - typically shorter and with greater flexibility.

5. Rent reviews and conditions / formulas surrounding these

In any UK commercial lease that extends longer than five years, a review of the headline rent will occur at the anniversary of the fifth year from the start of the lease. The review is actually based upon a hypothetical lease and the parameters and formulas that will play a part in determining the new rent are numerous.

6. Break options and conditions surrounding these options

Otherwise referred to as 'options to determine', these are usually found at some or all of the following lease-commencement anniversary dates; 3, 5, 10, 15, 20. They can be either 'tenant only', 'landlord only', 'rolling' or 'mutual' options to determine the existing lease. The conditions that must be met in order for a break option to be legally and effectively served by either party are numerous.

7. Alienation provisions and restrictions

This refers to a tenants' right to dispose of their lease to a third party via most usually, a subletting or some form of sharing in the event of the third party being an entity, subsidiary or affiliated company to that of the head lessee/ tenant.

8. Capital contributions from the landlord / lessor

There exist formulas in commercial real estate that whilst not bound by law, are bound by a long history of doing things in this way in relation to calculating certain capital contributions (such as special renovations / new fittings) due at the start of a new lease from landlords to tenants.

9. Rental deposits, covenant / deposit issues

The assessment of a potential tenant's (to a building) covenant strength is a crucial and often emotive part of any negotiation process. Once a tenant makes an offer for a building or office, they will be required to submit, where available, their most recent three years' of audited accounts to the landlord for review. There is a specific 'means test' that is employed to ascertain if a company's financial strength (or covenant) is robust enough for a deposit, or other form of surety to be deemed unnecessary.

10. Schedule of condition / dilapidations containment

It is possible in certain cases and scenarios to limit a tenant's repairing obligations (sometimes called 'dilapidations') at the expiry or earlier determination of their lease. This can drastically reduce the exit costs that a tenant would otherwise be liable for in relation to returning their office to the precise condition of repair that the office was in at the start of their lease. One way that a tenant may achieve this is by successfully negotiating with their prospective landlord the right to document, through words and photographs, the condition of the office at lease commencement - this is called aSchedule of Condition and is then appended to the lease. With an average office lease in London averaging not less than a five-year fixed term, a simple overpayment of the financial terms agreed, will provide multiple years of additional costs to the tenant. Having an independent industry expert on-side who understands the office market conditions, and is not confused or influenced by what property agents acting for landlords provide as their comparable evidence to support the terms they are requesting, is vital for any business looking to agree the best possible lease terms. This becomes even more important in an office market in which rental values are increasing considerably.

Luke Philpott is director of DeVono Property which acquires offices for companies moving into and around London

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Evening Standard

Housing boom pushing businesses out of the West End

By Oscar Williams-Grut
London’s housing boom is squeezing businesses out of the West End, a leading commercial property advisor warned today.
A survey by DeVono Property found demand in the area out stripping supply, warning that a lack of new development and expansion of existing companies in the area was forcing firms to look elsewhere.
The property advisor, which has acquired the most office space for firms in the capital over the past six years, said new office space developments were being neglected in favour of housing projects.
London has seen a flurry of residential activity recently, fueled by the Government’s Help to Buy scheme, while commercial projects such as 100 Bishopsgate and The Pinnacle, near Liverpool Street, have stalled.
DeVono highlighted the recent move of companies including Alexander McQueen, Esprit and Agent Provocateur to the eastern fringes of the city as examples of businesses being forced to look elsewhere for offices.
DeVono found the highest demand for West End space was in areas where large-scale residential developments are currently underway, such as Great Marlborough Street, Great Portland Street, Marble Arch and the edges of Covent Garden and Soho.
Adam Landau, DeVono property director, said: “Businesses struggle to get into West End streets where there might have traditionally been a ready supply.  Many SMEs are now settling for fringe locations such Holborn, Clerkenwell, and Shoreditch as a result of this and the increase in occupier costs.”

By Oscar Williams-Grut

London’s housing boom is squeezing businesses out of the West End, a leading commercial property advisor warned today.

Read more

A survey by DeVono Property found demand in the area out stripping supply, warning that a lack of new development and expansion of existing companies in the area was forcing firms to look elsewhere.

The property advisor, which has acquired the most office space for firms in the capital over the past six years, said new office space developments were being neglected in favour of housing projects.

London has seen a flurry of residential activity recently, fueled by the Government’s Help to Buy scheme, while commercial projects such as 100 Bishopsgate and The Pinnacle, near Liverpool Street, have stalled.

DeVono highlighted the recent move of companies including Alexander McQueen, Esprit and Agent Provocateur to the eastern fringes of the city as examples of businesses being forced to look elsewhere for offices.

DeVono found the highest demand for West End space was in areas where large-scale residential developments are currently underway, such as Great Marlborough Street, Great Portland Street, Marble Arch and the edges of Covent Garden and Soho.

Adam Landau, DeVono property director, said: “Businesses struggle to get into West End streets where there might have traditionally been a ready supply.  Many SMEs are now settling for fringe locations such Holborn, Clerkenwell, and Shoreditch as a result of this and the increase in occupier costs.”

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Evening Standard

London office space in demand

By Oscar Williams-Grut
London’s office market is benefiting from the economic recovery, according to the capital’s biggest office finder, which today said businesses were expanding at a record rate.
DeVono Property said it had seen a rise of almost 40% in businesses requesting an increase in office space in the 12 months to July compared with a year earlier.
It said City fringes, such as King’s Cross, Clerkenwell and Shoreditch, were among the most in demand locations for businesses looking to expand.
Adam Landau, director of DeVono, said the increase in activity was evidence of the economic recovery. “While certain sectors have enjoyed growth over the course of the recession, such as technology, it’s now across practically all industries,” he said.
“With expected market rental growths, many businesses are future-proofing for the next five years.”

By Oscar Williams-Grut

London’s office market is benefiting from the economic recovery, according to the capital’s biggest office finder, which today said businesses were expanding at a record rate.

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DeVono Property said it had seen a rise of almost 40% in businesses requesting an increase in office space in the 12 months to July compared with a year earlier.

It said City fringes, such as King’s Cross, Clerkenwell and Shoreditch, were among the most in demand locations for businesses looking to expand.

Adam Landau, director of DeVono, said the increase in activity was evidence of the economic recovery. “While certain sectors have enjoyed growth over the course of the recession, such as technology, it’s now across practically all industries,” he said.

“With expected market rental growths, many businesses are future-proofing for the next five years.”

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Evening Standard

Nearly 25% of London offices in Midtown have no air conditioning

Have little puddles of sweat been pooling around your office chair during the recent heatwave? Well, take some comfort in the fact you’re not alone. Nearly 25% of London offices currently available to rent between the City and the West End have no airconditioning, according to data from DeVono Property. Apparently the worst place to work in the heat is the area known as Midtown, where more than a third don’t have the facility. Spy wondered what that smell was...

* Have little puddles of sweat been pooling around your office
chair during the recent heatwave? Well, take some comfort in

Read more

the fact you’re not alone. Nearly 25% of London offices currently
available to rent between the City and the West End have no air
conditioning, according to data from DeVono Property.
Apparently the worst place to work in the heat is the area known
as Midtown, where more than a third don’t have the facility. Spy
wondered what that smell was...

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Evening Standard

Fitzrovia is streets ahead, says DeVono

By Oscar Williams-Grut

Businesses still want a prime address in London, with office space around Great Portland Street in demand the most, according to a leading commercial estate agent.

DeVono Property today said it has seen overwhelming demand for space in the Fitzrovia and Noho areas around Great Portland Street so far this year, with 30% of all firms contacting it requesting space there.

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Co-director Adam Landau said businesses were attracted by the mixture of shops, restaurants and open spaces in the area, adding: “Rental prices are still reasonable compared to bordering Soho, Marylebone and Mayfair.”

Firms with offices in the area include The Engine Group, Gazprom, Aegus, JPMorgan and Santander. DeVono said it has seen demand from all sectors and across all business sizes.

Landau said Southwark Street and the SE1 postcode was the second most popular area in London, with demand increasing at a “staggering” rate. He said: “The Shard is bringing even more popularity and buzz to the area.”

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Evening Standard

The hidden costs of moving office

For an SME, moving office can be expensive, yet few plan for the costs. Plan ahead to make a move hassle free, whilst staying aware of potential hidden costs, says Adam Landau of DeVono Property.

1. Stamp duty: http://ldccalculator.hmrc.gov.uk

Stamp Duty Land Tax (SDLT) is charged on land and property transactions in the UK. The tax is charged at different rates and has different thresholds for different types of property and different values of transaction. Other factors within a lease such as incentives provided by the landlord in the form of rent-free periods and capital allowances (a financial contribution from the landlords to help with interior costs as an incentive) have a bearing on the level of SDLT due.

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2. Landlords approval for alterations: estimated between £750 - £3,000

In a majority of cases, before a tenant may undertake any non-structural alterations to their office space they must receive from their landlord formal consent for such works. A License for Alterations is then appended to the lease once the landlord approves all plans for alterations. The costs involved in this process are often due to the landlord needing to involve professionals to approve the works the occupier wants to initiate (surveyor) and the legal costs for a solicitor to document these changes.

3. Dilapidations (Cost of putting the office back into like for like state pre tenancy): estimated between £5 - £20 per sq ft of the net floor area

A tenant’s repairing obligations under either an FRI (Full repairing and insurance) or an IRI (Internal repairing and insurance) lease are often referred to as dilapidations. In simple terms this involves the tenant reinstating their office in to the exact condition that it was in when their lease first completed.

4. Service charge increases: estimated increases between 5 - 10% per annum year on year

The running and repairing costs or ‘service charge’ of any building are subject to annual review and can actually go up, or down.

5. Refurbishment / Fit out costs: estimated between £15 - £65 per sq ft of the net floor area

This is a variable cost entirely dependent on the needs of an individual business and the level of quality that they require from their office design /fit out.

6. Survey of the premises: £750 - £5,000 dependent on size and condition of premises

A building survey is recommended to assess the structural integrity and services of the building. A survey is particularly necessary if the lease will be a fully repairing and insuring one (FRI). Any issues that the survey brings to light will then need to be dealt with in advance of the lease completing by the tenant’s representatives and advisors.

7. Schedule of Conditions (Written and photographic outline of the condition of space prior to occupation) where appropriate: £1,000 - £2,000

If the condition of an office at the start of a new lease is anything other than fully refurbished, then that condition should be documented by a series of photographs with written commentary against them. This Schedule of Condition needs to be agreed by both tenant and landlord and appended to the lease before its completion. As this is a detailed process and can have a financial effect on exiting the lease for the occupier and the landlord at the end of the term both parties will need to involve a surveyor and a solicitor to make sure this is structured properly and fairly.

8. Superior landlord’s consent to approve sub-let / assignment of a lease: £500 - £3,500

When an occupier does not need all or part of their existing office space they should have pre agreed provision within their lease that allows for them to find a new tenant to replace them in the space. There are two forms of this which offer a similar result, sub-letting and assigning. This requires the consent of the superior landlord (the ultimate owner of the property/office/building) before it can legally complete. The superior landlord usually has an obligation to not unreasonably withhold or delay their consent, providing that any potential restrictions regarding subletting or assigning That had been pre agreed and documented within the lease have been met and adhered to.

9. Rent reviews (every five years based on a new lease): dependent on market conditions

Leases that extend beyond five years will usually be subject to a rent review every five years. This applies to both new leases and to subleases. At the time of review, advisers to the landlord will inform them of relevant evidence about available and completed deals on offices in comparable buildings.

10. VAT: payable on rent, service charge and deposit (where applicable) for VAT registered buildings at a current rate of 20%

There is Value Added Tax (VAT) associated to renting and purchasing commercial buildings if they have been elected for VAT. A majority of commercial buildings are VAT elect but in certain cases a landlord may wish to not elect their building for VAT, usually to make their building more appealing to occupiers that are unable to recover VAT. Landlords are able to do this very easily but naturally they will then not be able to recover VAT costs when they undertake any works to the building and also on the rent they receive. Buildings located in the EC3 postcode of London are the most relevant example, due to the larger number of commercial occupiers from the financial sector (that are unable to recover VAT) being based here.

11. Building’s and terrorism insurance estimated £0.50 - £1.00 per sq ft

It is a landlord’s responsibility to insure the building, though they then recover these Costs from the tenant(s) of the building sometimes in the form of service charges.

12. Contents insurance: Relative to the contents of your office and the insurer

Insuring the contents of a specific demise is the responsibility of the tenant and covers any losses / damage that may be caused by circumstances such as theft and water damage.

13. Rates increases: every fifth year with the most recent April 2010 and based on office rental values two years prior to the fifth year re-valuation. Please visit this link for rateable values: http://ratinglists.voa.gov.uk/irl2k5/index.jsp

The business rates payable are derived as a percentage of the Rateable Value (RV) which is the value that represents the open market annual rental value which is the rent the property would let for on the valuation date, if it was being offered on the open market. Currently the rates payable in England are based on 43.3% of the RV. In the City of London they are 43.7%.

14. Solicitors costs: estimated £2,000 - £8,000 (potentially higher depending on size of office and structure of the lease term)

Usual practice in respect of any new lease direct from the freeholder of a building is for the tenant and the landlord involved to cover their own legal fees incurred. It is a point of negotiation over who pays the landlord’s legal and also professional (such as surveyors) costs.

15. Acquiring agent’s fees: T.B.C

It is very important for commercial occupiers to be represented when they lease or purchase a commercial space. Taking professional advice in the search and negotiations will result in better financial and practical conclusions. Working with a property company that has no conflicts of interests by only ever working for tenants and not landlords is very important. A company such as this will look to achieve fairer occupier specific terms on your behalf as they will never act for a landlord and therefore their aims are the opposite to a landlords agents. As with any professional service, it is a simple untruth to term agents’ fees as a cost as they should be self-funding in the advice, savings and time saved that they can provide.

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Evening Standard

Olympic Games have left gold medal legacy for London as hi-tech centre

The Park is perfect place for creative technology firms to build a digital equivalent of Canary Wharf, bringing jobs and training for local young people

Now that the leaves are falling and the Olympic and Paralympic memories are starting to fade into the autumn mist, it might be tempting to imagine the Olympic Park and its surroundings as having no further purpose. Far from it: the site is being prepared for a hitech future at the forefront of the digital economy.

For many organisations involved in London 2012, now is the time to start making good on their legacy plans and to create new opportunities for London and the UK as a whole. Technology companies are targeting the Olympic site as a new base, bringing with them new building developments as well as training and employment opportunities.

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“The Olympic site was once marshland but is now one of the most well connected parts of the UK from a technology and infrastructure prospective,” says Adam Landau, co- director of commercial property estate agents DeVono Property.

“Some of the largest available spaces, such as the media centre and technology infrastructure centres, are prime examples of the type of spaces that the Google and Facebook equivalents of tomorrow could become part of.” According to Landau, the amount of space available, coupled with a state of the art network infrastructure, makes the Olympic site and its environs an attractive alternative to other parts of London. “This is the perfect opportunity to create a Canary Wharf equivalent for technology companies,” says Landau.

That’s certainly the plan, says Duncan Innes, executive director for real estate at the London Legacy Development Corporation, who believes the area will be an ideal location for existing businesses and start-ups alike. “This will particularly be the case for fast moving, fast growing IT and tech companies,” he says. “Businesses that move to the area will find themselves at the centre of a new and vibrant part of the city with unrivalled infrastructure, world-class venues and fantastic parkland.”


That infrastructure extends well beyond subterranean fibre-optic cabling and manicured paths. For example, nine rail lines serve Stratford Station and they have had their mettle thoroughly tested by this summer’s crowds, making living and working in the new sites much more practical.

Gradually some of the venues that brought the Games so successfully to life will find new incarnations: the anti-doping lab will function as a research laboratory, while The International Quarter (TIQ) Stratford City will spring up on the site of the London 2012 security base (providing four million sq ft of new work area and three acres of open spaces). “The huge size and capability of the IT infrastructure and broadband width in place makes TIQ Stratford City particularly attractive to technology firms,” says Kevin Chapman of property group Lend Lease.

There are also grand designs for the former media headquarters, which include incubator spaces for start-ups, training facilities for apprentices and even a university research centre. “The East End has a rich culture of creativity,” says Innes. “We believe the press and broadcast centres will become a new commercial centre for East London that will bring thousands of jobs and training opportunities for people in the area.”

Gavin Poole is CEO of iCITY, the company selected by the London Legacy Development Corporation as the sole preferred bidder to take the media centre forwards. He believes the site has the potential to generate jobs and promote innovation. “The press and broadcast centre is one of the most digitally connected buildings in the world, providing an almost unlimited bandwidth connectivity. With the flourishing digital and creative industries sector just up the road, iCITY will extend the thriving technology cluster in east London onto the Olympic Park, creating over 6,500 jobs in the local communities and adding £460m to the national economy.”

But before anyone can take advantage of those tech jobs, they’ll need the right training in science, technology, engineering and maths. Developing these STEM skills among the workforce of the future is another huge part of the legacy challenge that corporate bodies and educational institutions alike have set themselves.

“STEM education is important in ensuring that local young people can take maximum benefit from job opportunities in the companies moving into the area,” says Denise Brown-Sackey, principal of local FE institution Newham College. To that end, she explains, the college is planning to develop a new campus in Stratford (potentially on the planned Queen Elizabeth Olympic Park) as well as modernising its existing Newham site.

The college’s Discovery Lab is also training local companies in nanotechnology and near-field communication technologies (such as those used in Oyster cards), she continues. Science A Level applications increased this September so interest is on the rise, but there’s more work to do. “A new skills and enterprise campus would be a major boost to skills development in the area,” says Brown-Sackey.

“Particularly, the Stratford campus would have a science, technology, engineering and mathematics specialism aimed at equipping the local population to meet the challenges of new technologies.”

Developing a larger ICT-skilled workforce could also have international benefits for the UK, and it is in this area that some of the larger Olympic sponsors are getting involved. As part of a five-year “Building a brilliant future” plan that started with London 2012, Cisco has increased the number of its networking academies with a view to improving technology education.

“We’re providing skills and an envi ronment in which hi-tech entrepreneurship can thrive and will help the economy,” says Neil Crockett, Managing Director
London 2012.

Students at the academies (of which there are 10,000 worldwide) develop foundation skills in ICT as well as improving their problem-solving abilities and learning to work collaboratively.

This means they’ll be well equipped with globally recognised qualifications to maintain networks such as those on the Olympic site, and similar systems worldwide, which will form a significant part of the global economy in years to come. “We need to increase interest in science, technology, engineering and maths in the UK to produce a high calibre of skills, enabling us to compete globally,” explains Crockett.

Other Olympic sponsors are also working with the community to show how science and technology skills can be applied in real-world settings.

EDF’s environmental education programme, the Pod, was part of the “Get Set” initiative developed by the Games organiser, Locog, and helped students learn how to reduce their school’s carbon footprint. The company is now collaborating with the environmental youth charity Envision on a three-year legacy project to work with students in the Olympic Park area on a range of initiatives, including those aimed at helping local residents make their communities more sustainable.

All of these projects, whether designed to enhance the built environment of the
Olympic Park or the skills of the people living and working there, show that although the excitement of the Games themselves is over, their influence lives on. The slogan “Inspire a generation” can be applied to sport, naturally, but also to those who want to better themselves, gain new qualifications and be a part of a driven, innovative, digital era.

It’s already making a difference to the streets of east London, according to school principal Brown-Sackey.

“The area is seeing significant benefit from having hosted the Olympics. The huge infrastructure developments that young people are seeing, coupled with the overwhelming achievements of the Games, are contributing to a sense of ‘can do’ and increased local pride.”

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Evening Standard

What we really want is a work-out at the office gym

One day a week working from home, a reliable Tube, a decent sandwich bar and nice toilets - that is what it really takes to keep us happy at work.

Although many Londoners worked flexibly and from home during the Games, if given a choice most would work remotely for one day a week. It seems we really enjoy the interaction and buzz of being in the office.

Employers who help us to stay fit,  also keep us happy, with nearly half of Londoners surveyed saying they would choose having a gym or gym access as a perk or benefit beyond a games room or even a cafeteria.

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The desire to keep healthy extends to cycling to work with 47.5 per cent of those surveyed saying they would consider it if they had access to changing facilities and bike storage.

In addition to putting fitness before fun and food, London's office workers value comfort, according to the Working in London in 2012 survey conducted by DeVono Property, the commercial property company which finds and negotiate offices for businesses in the capital.

Amazingly, two in three of the 1000 office workers surveyed said they would put in more hours if they had more comfortable offices.

Other important aspects of our day include lunch - with a sandwich bought from a local independent shop the most popular choice - and toilet facilities - although fewer than four in 10 say their workplace has modern and pleasant restrooms.

Working near a reliable Tube or train line is also paramount to London commuters. The survey revealed that the recently upgraded Victoria Line is perceived as the most reliable and consistent, with the Circle and Northern Lines rated the least so.

DeVono co-director, Adam Landau, says: "What we know from this survey is that the desire for work/ life balance is now stronger than ever. The culture of companies looking after their employees better and providing them with more flexibility while also incorporating lifestyle options is clearly evident, and London leads the way in this trend."

In numbers

How many days per working week would you choose to work remotely from home?

5           4.2%

4           0.0%

3         10.8%

2         37.1%

1         39.2%

0           8.8%

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