As we head towards the end of the calendar year, commercial property agents are having to work as hard as ever to secure the property deals which support a healthy churn of day-to-day business.
Will Mooney, Partner at leading consultant Carter Jonas, gives his take on issues in the commercial property world.
The ignominy of being ‘awarded’ The Carbuncle Cup for the worst building in Britain this year belongs to a mixed-use, 17-storey scheme of 109 apartments spread across interconnecting blocks, overlaid across a 7,800 sq m superstore located in The Royal Borough of Greenwich.
It’s not pretty but in its defence, the winning scheme is sited in Woolwich – a very densely occupied part of a borough which also boasts its own royal park in Greenwich Park and the relative open expanse of Blackheath – the latter in shared ownership with the neighbouring borough of Lewisham.
To ask architects to provide a design for a building which looks good, works well and to a tight budget and commercial viable timescale is no easy challenge but it’s one the profession is being asked to do more and more. And not only in megaopolis cities. Many of the new buildings in Cambridge have come in for carbuncle critique in the past and present and, no doubt, will in the future too.
I’ve yet to meet an architect who doesn’t feel passionate about and doesn’t want to deliver really good design. With scarcity of allocated supply of land meaning anything up to 50 percent of the cost of a new commercial building in areas squeezed for land availability, commercial cost is king when it comes to the given brief.
The latest edition of the gazette published by the Cambridge Association of Architects - which is the local chapter of the RIBA - is called ‘Aspirational Working’ and density is one of the key elements acknowledged in the wider theme of considering how and where we are going to work.
In contributing to an article entitled “Park Life” which looked at how the ubiquitous Business Park could evolve to meet the modern demands and constraints of working life and viability, commercial property agents in the city were asked for their input. In preparing the article, its author focused on transport as one way to increase building density. In essence, basement parking or podium buildings or shared company parking to allow combined people and car friendly spaces between closer buildings.
Setting aside the cost of engineering solutions to underground building in the Cambridge fenland, it was realistic to see the importance of the car acknowledged in the equation. Too often, the fact that most people who work in Cambridge don’t actually live within walking or cycling distance of their workplace or have access to public transport when they need it to get to work in a timely fashion is overlooked.
To accommodate vehicles is a way which can be achieved by a design and engineering solution to maximise land use, as well as being aesthetically pleasing, has got to be a bonus in attracting a commercial developer to the viability of a potential site, not to mention occupiers.
Coming back to the Carbuncle Cup, the fact that the Woolwich scheme is mixed use with residential and commercial tenures couldn’t have helped.
That’s not to say the best don’t work and,locally, it will be interesting to see how the Cambridge Fire Station development on Parker’s Piece matures but this was a hi-spec commercial mixed with high-end residential use.
You see, historically, we’re not very good at sharing our homes with other people’s place of work. Lack of any other option in the future, due to land availability, might mean we’ll have to get real and change.
The summer has seen property interests focus on the south and north poles of the compass points of Cambridge.
Early in July, the Government announced the release of the first tranche of a big pot of £6 billion of cash for the English regions. With an eye on being better together and although the phase 1 £12 billion is very much for England, the Prime Minister heralded Growth Deals as ‘...a crucial part of our long-term plant to secure Britain’s future.’
In seeking to do our best to pour a quart into a pint pot when it comes to business space requirements in Cambridge in current market conditions, property agents are also tasked with finding the right kind of space in which modern businesses and their employees want to work.
A year ago I was anticipating the end of the central banks’ monetary stimulus for their economies. In the case of the Bank of England, it was, at that point, the £375 million worth of quantitative easing.
Setting aside the uncertainty of interest rate rises, what could severely hamper the speculative development all peer Cambridge agents are calling for in the long term - and have been eagerly anticipating for Q4 2014 and Qs 1 & 2 in 2015 - is a steep increase in build costs.
The sound of the “plink, plink Pfiz” echoes around the Cambridge commercial property market presently as the wider political debate hots up on the national and international stages with the prospect of a hostile takeover bid of AstraZeneca by US pharmaceutical company Pfizer.
It was neither a surprise nor an April fool to read on 01 April that once the devil of the detail of the Chancellor’s Budget statement in March had been examined, it turned out the local headline-grabbing £1 billion ‘City Deal’ for Cambridge was more damp squib than big deal in the eyes of business in the city.
Property agents regularly publish research and statistics in seeking to present a view – their view – of their market.
Gone are the days when land availability is a matter of concern just for planners and developers in the business property sphere in and around Cambridge. Anxiety has been expressed below-the-line by some agents since the early years of this decade.
The year has been heralded as one in which investor confidence in property will return in earnest. Rural property peers have pointed to the ‘froth’ skimming off premium agricultural land values this year as property-minded investors return with more confidence to the more obvious residential and commercial sectors for the first time post-credit crunch.
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