A lack of suitable office space in Scotland’s key cities, combined with rising rents, is leading to companies looking to take offices in locations outside the city centre, according to Savills Scottish Office Market report. Savills says take-up of office space outside the central business district’s of Aberdeen, Edinburgh and Glasgow was 4% higher in the first quarter of 2016 than the previous quarter. The firm believes this trend is set to increase as occupiers continue to be attracted by the low rents on offer in out of town locations, where in some cases there can be a 50% discount on the £30 per sq ft prime rents being achieved in the city centre. “The out of town markets are on the cusp of experiencing a resurgence in popularity, particularly in Edinburgh and Glasgow”, says Mat Oakley, head of commercial research at Savills. “This is primarily due to occupiers being able to save money on rents compared to inner city locations.” As a result Savills predicts Scotland’s strongest rental growth could be seen in the out of town markets of both Edinburgh and Glasgow, where rents in the early £20’s could be achieved in the next three years. Savills research shows demand for office space across Scotland has increased significantly this year: Glasgow has seen approximately 300,000 sq ft (27,870 sq m) of space let in the first quarter of 2016 alone, more than half of the total amount of space taken in the city during the whole of 2015. Edinburgh, meanwhile, saw its second strongest quarter of leasing activity since 2013 in Q1 2016, (324,000 sq ft / 30,100 sq m). According to the report, this spike in demand, combined with further employment growth and falling availability of Grade A space, has led to a squeeze in supply. Total supply in Glasgow has now fallen below two million square feet for the first time since 2011, with only approximately 500,000 sq ft (46,450 sq m) of Grade A space available. In Edinburgh availability has steadily fallen since its peak in 2008. Savills estimates that there is now only 2.1 million sq ft (195,100 sq m) of office space available across the city’s combined central business district and out of town markets, of which only 365,000 sq ft (33,910 sq m) is Grade A. Scottish office investment volumes have stayed healthy, with just over £811 million transacted in 2015, 33% above the long run average, and just over £300 million transacted in Aberdeen, Edinburgh and Glasgow in the year to date. Prime yields have fallen in Edinburgh and Glasgow, leaving both markets at 5%. However, Aberdeen’s recent slowdown in leasing activity has seen yields there rise from 6% to 7% over the last two years. Of all Scottish office investments in 2015, 44% were by non-domestic investors according to Savills research. Figures show this has continued into 2016 with 89% of all purchases made by non-domestic investors. Savills attributes this to a combination of UK institutional investors being quiet in the run-up to the EU referendum and overseas investors, undeterred by the forthcoming EU referendum, being attracted by recent high levels of development activity in Scotland and the promise of continued solid rental growth. Nick Penny, director in the investment team and head of Savills Scotland, comments: “The national trends do seem to point to non-domestic investors being less concerned about the outcome of the EU referendum, and in some cases actually seeing it as a buying opportunity, with evidence that investor demand for the Scottish cities has been less affected by the Brexit debate than other locations. Scottish office investments still look cheap in comparison to the English cities. This, and the solid rental growth story, will continue to attract investor interest in Scotland’s prime office markets.” Source link

The annual rate of house growth in key cities in the UK has started to slow after 12 successive months of rising prices, according to the latest index figures to be published. But there is some regional variation and house prices in large regional cities outside southern England continue to grow while those in London have seen a market slowdown, the Hometrack cities index shows. Outside the south house price growth continues to hold steady at 7% to 8% per annum with no sign of an imminent slowdown. Aberdeen is also registering a slower rate of price falls compared to recent months with a decline of 8% compared to 10% the previous month. Overall city house prices increased by 9.5% year on year in July, down from 9.9% in June with Bristol in the south west seeing the strongest growth at 14% followed by London at 11.7%. While quarter on quarter the highest growth was in lower value, higher yielding cities where prices are rising off a lower base such as Glasgow, up 5.2%, Liverpool up 4.4% and Manchester and Nottingham both up 3.4%. Even although it has the second largest annual price growth, London has registered a marked slowdown in house price growth over the last three months. Average growth in the last quarter was 2.1%, the lowest rate for 17 months. The index report suggests this is due to weaker investor demand, affordability pressures and Brexit uncertainty impact demand at the same time as supply has risen. It points out that prices are still well up year on year but the signs are growth will slow further over the coming months. Cambridge saw prices fall by 1% over the last quarter and the report says that prices in the city are more sensitive to weaker demand although the annual rate of growth is still running at 7.1%. The report says that in the absence of adverse economic trends impacting employment and mortgage rates, the near term outlook is for a continued slowdown in London and stable growth rates in regional cities as households’ price record low mortgage rates into city house price where affordability remains attractive. ‘We continue to believe that turnover will register the brunt of the slowdown in London. In the face of lower sales volumes agents will look to re-price stock in line with what buyers are prepared, and can afford, to pay,’ the report explains. ‘Past experience shows that this process can run for as long as six months and relies, in part, in how quickly sellers are willing to adjust to what buyers are prepared to pay,’ it concludes. Source link

23 September 2016 | Herpreet Kaur Grewal Serco Group has been named preferred bidder for the Barts Health NHS Trust soft facilities management services tender.  Barts Health, which covers the City of London and East London, is the largest NHS trust in England. The trust’s procurement has an estimated total value of up to £600 million over a potential 10-year term.  There is currently a mandatory standstill period following the appointment decision, according to a Stock Exchange announcement.    Following expiry of the standstill period, the two parties will finalise the terms of the contract in readiness for signature. Serco is to take over responsibility for soft FM services from Carillion, which had been awarded a 22-month extension to its deal in 2014. In March, Barts renewed its waste management contract with Skanska for a further five years. Source link

Gordon Dunne, who will be Keltbray Structures’ managing director, has taken a minority stake in the business, with Keltbray Group taking on the remaining 80 per cent. The new business was created after the wider Keltbray Group purchased some of Dunne Group’s assets after the latter fell into administration in July. The concrete arm will be headed up by Keltbray MD John Price, who will now have the additional role of Keltbray Structures chief executive. Speaking to Construction News, Mr Price said Mr Dunne was the “perfect person” to run the new business, with the support of the wider Keltbray Group. “Gordon Dunne knows an awful lot about concrete frames and delivery, he’s been doing it for a very long time and understands concrete through and through,” he said. Mr Price confirmed Mr Dunne had taken a 20 per cent stake in the company – a decision that was made separately from the asset acquisition, he added. Asked whether he had concerns about the future relationship between Mr Dunne and Dunne Group creditors, Mr Price said: “Gordon has been in business for a long time and has paid a lot of bills during that period of time. Unfortunately he’s gone into administration [but] the deal that we’ve done with the receiver is a good deal for the creditors that exist.” Keltbray Structures has a target turnover of £50m by the end of 2017, with a workforce of around 250. Mr Price said it would look to grow this at a “controlled rate” thereafter. The decision to set up a concrete arm came at the request of clients, who were increasingly asking for “a concrete option”, Mr Price said. “A lot of clients have been asking us for some time for a concrete option and then there was an opportunity to do it with the demise of Dunne,” he said. Keltbray had intended to set up a concrete arm before Dunne Group fell into administration but the company’s collapse allowed the demolition giant to move into that market quicker. Mr Price said there was a good market for concrete frames in Scotland as well as opportunities for Keltbray Group’s other offerings. “We are looking at demolition up in Scotland on the oil platforms and have done work on the gas receiving facility in Aberdeen,” he said. The new business will offer two work streams: a standalone concrete frame offer, where Keltbray has not been involved in the preceding trades; or bolting on the concrete offering as part of a package. Source link