In recent years, the waterfront area of Glasgow has become a new go-to destination for business. It was once a shipbuilding and industrial heritage, but the area has skewed towards office developments as it builds its reputation as a modern business district.

Financial service giants including JP Morgan and Barclays and public sector bodies such as HMRC are stepping in, with more to come as the southern bank of the Clyde undergoes wider regeneration.

Mike Buchan, JLL Glasgow lead director states that Glasgow has a compact city centre and finding the larger building footprint occupiers are increasingly looking for, is more difficult. Hence, people are realising the waterfront area is a good option because it has the space for companies to build appropriate scale of offices to their specification in a location close to the key Glasgow transport connections.

He further added that Glasgow’s skyline is certainly changing and there’s demand for taller buildings.

Similar to other UK cities, Glasgow-based businesses are seeking modern, flexible buildings with inspiring external environments and nearby amenities such as cafes, gyms and restaurants that will attract and retain skilled workers.

Barclays is creating a further 2,500 jobs at an office campus as part of the Drum Property Group’s Buchanan Wharf development in a move that is believed to be the largest recorded office deal in the UK regions over the past decade. The development would also include a further 360 build-to-rent apartments to help accommodate the city’s growing workforce.

JPMorgan Chase has also just announced the development of a new technology hub for 1,750 people on Argyle Street.

A £25 million investment in Custom House Quay to further improve the Quay walls, aims to pave the way for future redevelopment and usher in a new chapter for the area as a vibrant place to work and socialise.

Future plans include a mixed-use scheme in the Candleriggs Quarter which would combine offices and homes with shops and leisure. Further along the waterfront towards the west end, a £100 million retail outlet are planned with restaurants, shops and a cinema.

“Glasgow City Council are acutely aware that Glasgow’s highly-regarded universities are producing the talent the city needs to thrive; now it’s all about providing the right environment and community to encourage them to remain in the city after graduation,” says Buchan. “Glasgow is facing competition from the major UK regional cities and beyond, therefore new commercial and residential developments are essential for the future success of the city.” 

 

Redeveloped train stations

Investments in train stations, as part of wider infrastructure projects, have aimed to position UK towns and cities as well-connected destinations.

This include the transformation of Manchester’s central Piccadilly station to host the planned HS2 high speed rail link, as part of a bigger development to create a new city district with 5,000 homes, 250 hotel rooms and hundreds of offices and shops. The project also include the £161 million revamp of Leeds Central Station to make the station a hub for national services, as well as remodel the surrounding roads and build over three million square feet of shops, offices and restaurants.

“The modern rail project can be transformational,” says Charles Pinchbeck, Head of West End Development at JLL. “Train stations are an integral part of placemaking schemes, offering the accessibility that is a key factor in the regeneration of an area.”

 

Successful Placemaking

Good design plays a critical role when it comes to the use of space surrounding the architecture of the building, whilst companies and homebuyers increasingly prioritise wellbeing and sustainability.

“Placemaking is one of the greatest trends of the century – people don’t just want to be in buildings, they want to be in places. The quality of the environment is absolutely crucial – is it healthy, stimulating and sustainably built?” says Pinchbeck.

“Accessibility was not the catalyst for the regeneration, but the making of the place itself,” Pinchbeck added. “For a redevelopment scheme to succeed in boosting the economy and improving quality of life, it needs to offer good transport links as well as a curated retail, office and leisure environment with high-quality buildings to create the places where people want to be.”

As towns and cities across the UK look to attract a new wave of businesses, investment and people in the coming years, trains stations will continue to be at the heart of urban modernisation projects.

 

For more information about UK investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

27 Apr 2020

International investors are targeting Japan’s ‘living’ sectors - new niches in the residential market which are being driven by demographics and changing lifestyles.

In June last year, Aberdeen Standard and Sumitomo Mitsui Trust Real Estate Investment Management announced a joint venture to invest in multifamily, senior housing, student housing and corporate housing in Japan, primarily in Tokyo and Osaka.

Multifamily is rapidly becoming an institutional real estate sector in Japan, with vehicles launched by groups such as UBS and Nuveen, however senior living, student accommodation and co-living are establishing their credentials.

“In terms of yields, these three sectors can offer investors a 50-100 bps premium over the multifamily sector, which ought to draw out more interest in these sectors over the longer term, says Koji Naito, director of JLL Capital Markets, Japan.

Japan is famously the world’s oldest nation, with 35 million people aged over 65, and its rapid ageing is driving demand for senior housing, primarily in the aged care sector - nursing homes rather than independent living accommodation for retired people.

Aged care, especially that catering for the over-75s, is booming, says Nick Wilson, head of Asia Pacific capital markets research at JLL.

“The government is not rolling out many public sector facilities and instead is providing development incentives to encourage more private facilities. With long wait times in the public sector, demand is rising.”

 

Foreign student accommodation and co-living spaces

Japan is targeting an increase in foreign students in order to promote itself as an international location. It is seeking at least 300,000 foreign students each year and fell only slightly short in 2019, with 298,980 registered.

Domestic investors Itochu Corporation and Mizuho Financial Group have launched student housing brands, as has international sector specialist GSA, in partnership with Star Asia Group.

“In Japan, the current stock of student housing is very old and outdated, which is normally unacceptable for overseas students. Due to the growing number of international students, investors can see a huge opportunity for the sector, to meet the need for high-quality properties,” says Naito.

Modern specialist student accommodation may also attract Japanese students,” says Wilson.

“Domestic and overseas students may find it difficult to get leases with private landlords, who often require additional insurance or deposits. The upfront costs to get into private rentals is usually around three to five months of rent. Student housing concepts bypass this hefty upfront cost and provide furniture and utilities, making them a turnkey solution.”

Co-living, where landlords provide shared services and facilities for renters of small residential units, is at its early stages in Japan, which is “behind other global markets,” says Naito. However, a number of domestic co-living brands have been launched, including Sakura House and Bamboo House, both of which started out providing rental apartments to foreigners, but which have branched out into the new sector.

Shared housing is less common in Japan than in other developed nations, but the rise of the sharing economy is likely to encourage new modes of living. Co-living also bypasses the up-front expenses required by private residential landlords.

 

Finding right resources for new living sectors

A key differentiator for all three living sectors is their operational requirements.

Aged care facilities require specialist staff and management, as does student housing. The most successful co-living brands offer the same services over multiple locations. However the operational element of these businesses is not necessarily a negative for real estate investors,” says Naito.

“Many properties in these sectors are owned by the operators, so a relationship with operators is potentially one of the best ways to source product.”

 “Student housing and aged care are usually leased on long term agreements. For aged care leases can be more than 20 years, so there are additional benefits from a long-term investment standpoint,” says Wilson.

 

For more information about Japan investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

27 Apr 2020

From sustainability to the need to find new urban living solutions, what do the next 12 months have in store for UK real estate?

Amid Brexit, climate change and concerns about corporate social responsibility, real estate is at a turning point.

Today’s companies are increasingly having to rethink old business models and outdated workspaces to find new ways of working - and driving growth - that not only boost productivity and engagement among employees but also support the environment and add value to communities.

Investors are increasingly exploring new real estate sectors that can deliver both strong returns and fresh solutions to the growing challenges facing rapidly urbanising and ageing societies. From city warehousing to new styles of urban living, 2020 will see emerging trends gain traction. Landlords, meanwhile, are increasingly spending time curating buildings to create vibrant, amenity-filled spaces.

So just what does it all mean for the UK’s property market in 2020? Here’s our take on some of the key trends to look out for over the next 12 months:

 

1: Growing pace of urbanisation

Urbanisation shows no sign of slowing, says Jon Neale, head of UK Research at JLL. “By 2025, we expect there to be an extra 2.5 million people living in the UK’s city centres.

“As these urban populations expand, so will demand for housing, shops, leisure facilities, warehouses and office space. Real estate will need to adapt as competition for space intensifies; whether that’s offering flexible workspaces or multi-storey warehouses.”

City centre jobs growth will likely be focused on the tech and service sectors, with companies battling to attract the skilled workforces they need to thrive. Sectors like life sciences will be affected as this increasingly means locating in urban innovation clusters that offer coworking spaces to encourage collaboration.

 

2: Adopting a more sustainable point of view

Climate change remains high on the agenda with the UK Government committing to hit net zero carbon by 2050. The focus will be on mapping out the journey ahead to ensure buildings and operations meet ambitious net zero carbon goals.

Companies will also pay closer attention to their social impact in their decision-making. Air pollution, for example, will become a key consideration for both businesses looking at new offices and workers choosing where to live.

 

3: An office is no longer just somewhere to work

Changing work styles will continue to reshape traditional office spaces in 2020. Landlords are increasingly aware of the need to create people-centric spaces and are spending more time ensuring they have the right mix of tenants and amenities, especially as leases shorten and tenant expectations rise.

New uses like bike storage or electric vehicle charging, for example, are being added to the mix. Meanwhile, in-house cafes and restaurants serving a variety of healthy and high-quality food are providing the hospitality services that modern employees want.

Building design and management will also become more focused on health and wellbeing. Creating well-designed spaces, with good lighting and heating systems, or quiet spaces away from the hubbub of open-plan offices can all help boost employee productivity and engagement.

 

4: Growth of new urban housing solutions

As more people move into cities, new urban living solutions will be needed. Neale says the Build-to-Rent sector will grow rapidly in 2020.

“As urban life gets more expensive, the benefits of renting, rather than home ownership are becoming more apparent in these city locations,” he adds.

Co-living providers are expected to move out of London to other urban centres and retirement living schemes offering amenities, and care where needed, will grow.

 

5: Technology becomes more integrated

2020 is the year companies will invest heavily in tech and data as digital solutions gain momentum.

“Technology investment will be all about improving the day-to-day employee experience,” says Neale.

Everything from sensor-based lighting systems to using workplace apps to book meeting rooms can be good for companies’ sustainability goals and their finances.

As Neale says: “Crucially, these changes will also drive performance or efficiency benefits.”

 

For more information about UK investment opportunities, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

27 Apr 2020

JLL European Coliving Index research estimates there are 23,150 coliving beds either built or in the development pipeline across Europe and this sector has been on the growth in the last two years.

As population growth and the availability of viable living space in our cities becomes more acute, coliving is becoming a key component of the wider suite of housing solutions to meet the changing needs of city dwellers.

Coliving provides a flexible and modern solution at a time when demands on urban land use are increasing, impacting levels of supply and affordability.

Other aspects of coliving include the fundamental changes in consumer habits and lifestyles of younger generations and seek to deliver optimised personal and shared space, whilst promoting social engagement between residents, through a community-centric and hospitality-led management structure.

 

Coliving Market Supply

 

This map identifies the top coliving national markets across Europe, pinpointing key areas of growth and providing an understanding of what the sector currently looks like.

London and Amsterdam account for nearly 40% of total stocks.  This is unsurprising given their global city status, young populations and dynamic property markets.

 

Top 10 Key Cities with Coliving Spaces

 

1. Amsterdam

The Dutch capital has a high proportion of single person households (47.8%), while the young population has grown by 18.5% over the last decade. Nearly 4,000 coliving beds are planned.

2. London

3. Copenhagen

3. Paris

4. Berlin

The second lowest home ownership rate (14%) across the index and strong net migration ensure favourable conditions for coliving in the German capital. However, household formation is slower compared to other key markets.

5. Munich

6. Stockholm

7. Frankfurt

8. Vienna

9. Hamburg

 

List of key markets/ cities with most to least opportunities for coliving spaces

 

 

CoLiving in the 21st Century

As the effects of urbanisation and modern-day city life become more pronounced, coliving is going to become increasingly relevant in the 21st century city.

It is not a coincidence that the markets at the top of co-living index are those where housing pressures are greatest.

Therefore, despite the nascent nature of coliving, it is set to have a major impact on city living.

The coliving market is being driven by consumer demand, and in an era of free movement, globalisation, technological advancement and greater social mobility, flexibility is an essential component of living.

Hence, European cities of the future will be measured by sustainability, flexibility and liveability.

Coliving provides a natural progression in housing solutions not just for present residents, but for future generations.

 

For more information on European investment opportunities and its coliving spaces, you may contact JLL International Residential at +603 2260 0700 or wong.christine@ap.jll.com.

14 Apr 2020

JLL’s research has revealed that the price growth in South East London is forecasted to accelerate by 18% from 2020 to 2024, given greater certainty to the real estate market. Rental growth is expected to increase by similar percentage in the same period, indicating that the market will remain strong and steady.

South East London has the most significant regeneration areas in London and among the notable areas include Elephant & Castle, Kidbrooke Village, Aylesbury Estate, Canada Water, Greenwich Peninsula and Greenwich Millennium Village. There are also the unstarted Convoys Wharf, up and coming rediscovered Old Kent Road Corridor and Bermondsey.

“The housing market in the South East has been rejuvenated in the past few months. Buyers seem liberated and eager to purchase while we have seen many homeowners return to the market to sell now that the logjam has been freed,” says Graham Lawes, Director of Residential Sales at JLL Greenwich.

 

The splendour of South East

 

Homebuyers and investors are attracted to this part of London due to many reasons and high on the list are excellent transport links into Canary Wharf and to other Central London employment hubs. The introduction of the Bakerloo Line Extension would further improve the connectivity in parts of South East London.

Greeneries surrounding the space include Greenwich Park and Blackheath, whilst other landmarks are Royal Observatory, Cutty Sark, National Maritime Museum and 02 Arena. Prominent education institutions are The University of Greenwich, London South Bank University, The University College of Osteopathy, Ravensbourne University London and Trinity Laban Conservatoire of Music and Dance.

 

 

Bermondsey – A new wave of change

 

The population of South East London is forecasted to increase by around 16,000 people to 388,000 people in the period of five years. Majority of the residents are working professionals aged 25 to 34 years old.

This includes Bermondsey which has made its name by bagging the title of Sunday Times Best Place to Live.

 

 

Further to the redevelopment plan and expansion of Jubilee Line station, the pricing of new build apartments would be £700 - £950 psf. The rental pricing of one bedroom apartments can go up to £1,450 – £1,700 pcm.

One of the most outstanding projects in Bermondsey is the London Square Bermondsey scheme. The scheme involves the most recently launched phase The Pickle Factory, which would deliver 271 private units.

 

London Square – The Pickle Factory

 

The London Square – The Pickle Factory, known as The Tannery is a striking new building which features one to three bedroom apartments, with split-level designs and townhouse style privately accessed duplexes.

 

 

The City, London’s financial heartland is 10 minutes by underground from Bermondsey.

There are an estimated 24,420 finance and insurance businesses based in the City. On top of that, city institutions and employers are the Stock Exchange, Bank of England and Lloyds of London.

Global companies in the City include Aviva, Lloyds Banking Group, BT Group, Unilever, Prudential and Standard Chartered and leading law firms such as Allen & Overy, Linklaters and Slaughter and May.

London Square Bermondsey is also a few minutes’ walk away from More London, a location known for many professional and financial services firms. These firms are Ernst & Young, PricewaterhouseCoopers, Norton Rose Fulbright, Markit Group and Hitachi Consulting.

 

 

The nearest Underground stations to London Square are Bank (1 minute), Moorgate (3 minutes) and Waterloo (3 minutes).

For more information on London Square and other residential properties in South East London, contact JLL International Properties at +603 2260 0700 or Wong.Christine@ap.jll.com.

07 Apr 2020

The Vauxhall, Nine Elms and Battersea areas are known as the fastest changing neighbourhood in Zone 1 and set to come of age in 2021.

Battersea Power Station would not only deliver around 250 residential units. It would also become Central London’s third largest shopping destination. The area promises 20,000 employment opportunities and expectancy of 40 million visitors a year.

Companies like Apple are building its 500,000 sq ft office space in 2021.

JLL’s latest forecast have shown that there would be a 19% sales price growth and 18% rental growth in the next five years. The significant increase in rental growth is attributed to the key transport facilities including the Northern line extension in second half of 2021.

In the last five years, 4,996 private new build units have been completed. Around 4,810 units are currently under construction with 8,105 units in the development pipeline. The plans also include another 900 private units in the hitherto undeveloped Oval area.

Residential unit prices are the highest in Albert Embankment, ranging from £1,300 to £1,800 psf. On average, residential units in Nine Elms and Vauxhall would be priced around £1,000 to £1,600 and £1,100 - £1,600 psf respectively.

Educational universities in these uprising areas include Lambeth College, Royal College of Art, South Chelsea College, London School of Economics, CASS Business School, Imperial College London, Kings College London and London Metropolitan University.

 

 

Featured Projects

Embassy Gardens

 

 

Embassy Gardens is located in Nine Elms Lane, London SW8. The residential building comprises approximately 15 acres and would deliver up to 2,000 new homes plus office and flexible work space, new leisure facilities, 130,000 ft² of retail, bar and restaurant space including a new Waitrose supermarket. Phase 1 comprises of 3 buildings and approximately 600 units. The building is expected to be completed in year 2021.

 

Prince of Wales Drive

 

 

Prince of Wales Drive is a large development with multiple buildings. Set within 2.5 acres of beautiful landscaped gardens, these spacious apartments offers state-of-the-art residents' facilities including a 17m pool, sauna, steam room, resident’s roof terrace, 24-hour concierge and secure basement parking. The development is close in proximity to Battersea Park and existing transport connections at Battersea Park and Queenstown Road. Other benefits include the Northern Line extension and the future progression of the Nine Elms area.

 

Batterseas Power Station

 

 

The iconic Grade II* listed Battersea Power Station building and surrounding area is being brought back to life as one of the most exciting and innovative mixed-use neighbourhoods in the world – a place for locals, tourists and residents to enjoy a unique blend of restaurants, shops, parks and cultural spaces. The neighbourhood has been carefully curated to be a thriving quarter right on the River Thames. The vibrant Circus West Village already features world-class bars and restaurants, interspersed with the finest British and global retail brands. The addition of Electric Boulevard looks set to create an irresistible shopping and leisure destination. The new Zone 1 Northern Line Extension would be a gateway to ensure Battersea Power Station is well connected to the whole of London.

 

The Dumont

 

 

The Dumont is a new landmark residential development, comprised of a mixture of apartments and penthouses. Located on the Albert Embankment, The Alta Collection is an exclusive portfolio of 4 bedroom homes within The Dumont framed by open living spaces to showcase the far-reaching waterside views towards Chelsea, Battersea, the City and The Houses of Parliament.
Completing in Spring 2020, the homes would provide a sanctuary on the banks of the River Thames. Residents will benefit from a plethora of nearby famous landmarks including Tate Britain, Palace of Westminster and South Bank. The Clairmont is one of the most enviable homes in The Dumont, with access to its own jacuzzi and outdoor kitchen to provide the perfect outdoor entertaining space with direct river views. This Zone 1 location is within a short walking distance to Vauxhall national rail station and underground station connecting residents to the City and West End. For a more scenic route into central London, the Thames Clipper is accessible from Vauxhall St George Wharf Pier.

For more information about residential developments in Vauxhall, Nine Elms and Battersea, you may contact JLL International Residential at +603 2260 0700 or Wong.Christine@ap.jll.com.

07 Apr 2020

A surge in foreign transactions is expected as investors aim to beat the April 2021 deadline

 

British Chancellor Rishi Sunak has announced a two percent stamp duty increase for non-resident home buyers from April 2021 in the first Budget of the new Conservative government. This will affect all residential property transactions in England and Northern Ireland from next year, but not those in other UK regions. The Chancellor confirmed on Wednesday that money raised from this levy will contribute to building 6,000 new homes to help tackle the homeless issue in the UK.

An increase in stamp duty has been long anticipated, and this is lower than the three percent previously suggested in the Conservative party manifesto. Although tax increases are never popular, stamp duty on housing has proven a successful source of revenue for the government. Previous tax changes have been criticized for contributing to the slowdown of London property markets over the past few years, but the real impact on transaction volumes is unclear.

Other housing measures included in Budget 2020 were a further £12 billion and a timeline extension for the government's Affordable Homes Programme and an additional £1 billion to remove unsafe combustible cladding materials from older housing schemes. Not included was former Chancellor Sajid Javid's proposed 'mansion tax' that would have increased duties further on high-value homes.

 

How stamp duty works

 

Stamp duty on UK property increases according to value. Currently, there is no stamp duty on UK homes valued at less than £125,000 (up to £300,000 for first-time buyers). This increases up to 12 percent for homes costing more than £1.5 million and there's an additional three percent surcharge when buying a second home.

This means that, from April 2021, overseas property buyers could pay as much as 17 percent total stamp duty when buying expensive homes in England and Northern Ireland (not applicable to property in Scotland, Wales or other UK regions). Those who become UK residents after paying this surcharge may be entitled to claim a refund.

Real estate firms expect to see a surge in foreign transactions before the new tax rule comes into effect. Overseas purchases are then forecast to decline in the rest of 2021 before stabilizing again by 2022–23. At present, around 70,000 of the UK's 1.2 million annual property transactions are overseas purchases, particularly in investment hotspot London where many large-scale developments primarily target foreign buyers.

 

UK property still affordable

 

The stamp duty hike has faced criticism for potentially stifling the UK property markets just as they were beginning to recover from years of investor uncertainty. However, London will remain a competitive city by global standards even after the increase, especially in comparison to expensive alternatives such as Hong Kong, where overseas buyers pay an additional 33.3 percent tax on top of the purchase price. With foreign investors in the UK having benefited from the weakened pound in recent years, the move is seen by some as leveling the playing field for domestic buyers.

Nick Whitten, Head of UK Living Research at Jones Lang LaSalle (JLL), said: “The change in the rate of stamp duty for international investors was anticipated as part of the government's priority to 'level up' the distribution of wealth in the UK. However, it is vital to strike an appropriate balance in meeting this priority and enabling international investment which currently plays such a crucial role in unlocking the development of thousands of new homes in London and the UK's major regional cities.

“We welcome the delayed introduction until April 2021 to allow developers to explore options to adjust their delivery models. But time will tell what the long-term impact of the increase is, and whether it will threaten the future attractiveness of the UK and the viability of some housing schemes already in the pipeline.”

JLL forecasts moderate growth of one percent in the UK residential markets through 2020 as investor confidence slowly returns following Brexit. This is expected to increase to four percent per annum by 2022, when the more positive investment climate becomes better established.

 

For more information about residential properties in London and the United Kingdom, please contact JLL International Properties at +603 2260 0700 or Wong.Christine@ap.jll.com.

24 Mar 2020