CAPITAL WATCH ISSUE 1 2018

ROUND-UP Chinese Embassy moves east After months of speculation, the Chinese Embassy’s relocation from Portland Place in Marylebone to the site of the former Royal Mint in the City has been confirmed. This is a significant expansion in terms of footprint, with the Embassy electing to move from 30,000 sq ft in their current HQ to a site with planning permission for over 600,000 sq ft of office space across four buildings. The Chinese Ambassador referenced the number of historic renovations in their current premises, but highlighted China’s growing role in world politics and the need to find accommodation that matches their influence. The vendors, Delancey and the LRC Group, had worked closely with local stakeholders to gain planning consent for the 5.2-acre site, enlisting the experience of Sheppard Robson and Morrow & Lorraine to help transform it into a modern and flexible office destination. The Chinese Embassy’s decision to move further east comes at a time when both the United States and the Netherlands have opted to relocate to the so-called “Diplomatic Quarter” in the emerging Nine Elms district. Arguably, the former Royal Mint site has better transport connections, with Tower Gateway DLR station nearby and the City just a short walk away. It is anticipated that the new Embassy will be completed in late 2020, with a mix of office and retail space. There will also likely be an element of residential space to accommodate the Ambassador and on-site staff. Flexible workplaces target new funding Flexible workplaces continue to make headlines, but more recently coverage has focused on financing for growth. WeWork recently sold $702 million in bonds at 7.875% in its first ever debt offering. The bond offering was massively oversubscribed, allowing WeWork to increase the size of their offering by 40%. This move towards Labour sealed its best overall result in the capital since 1971 London at a glance By Graham Harding, Graduate Surveyor, London Capital Markets graham.harding @cushwake.com debt finance allows WeWork to move their corporate financing structure away from just equity, improve their corporate reporting ahead of a potential IPO, and provide cash for further expansion. Meanwhile, WeWork acquired the Chinese coworking start up Naked Hub as part of their expansion into China. Investor interest in serviced office providers shows no sign of abating, as a bidding war is brewing for IWG, the owner of Regus and Spaces. Lone Star, Starwood Capital and TDR Capital are believed to have made approaches to purchase the business, which operates over 3,000 locations across 115 countries and has plans to open a further 230 locations. Many believe that a move from the equity market will benefit the FTSE 250 company, as it will be better able to invest in expanding market share without concern for the short-term considerations such as like earnings per share. Zoopla bought by private equity firm US private equity group Silver Lake agreed to buy the company behind Zoopla (ZPG) in a £2.2bn cash deal, almost a third higher than its closing price a week before the takeover. Launched in 2008, Zoopla combines hundreds of thousands of property listings with market data, local information and community tools to allow consumers to research and in turn make more informed property decisions. Since its creation, Zoopla has become one of the UK’s most popular property search websites, attracting over 40 million visits per month. The deal not only highlights the value and importance of technology in real estate today, but also demonstrates the value of PropTech through its ability to cross-sell into other industries. Along with Zoopla, ZPG also owns household energy comparison site uSwitch, another property website PrimeLocation and personal finance comparison site Money. co.uk. Analysts are predicting good chances that ZPG will be able to cross- sell products across its platforms. Creatives move west Publicis Media have taken 212,000 sq ft over seven floors in 2 Television Centre, the mixed-use development designed by Stirling Prize-winning practice AHMM. This is the largest office transaction signed to date in central London. Television Centre is part of the wider regeneration being carried out by Stanhope, Mitsui and AIMCO in White City. The regeneration is set to provide over 5,000 new homes, 2 million sq ft of commercial office space, 30 acres of public spaces and 19,000 jobs. The area benefits from its proximity to Westfield White City, which itself brings over 400 stores, a cinema and other leisure amenities. Publicis is one of the world’s largest media agencies with over 23,500 employees worldwide. They plan to consolidate their six different brands in the building, each on separate floors, each with their own distinct style and character. Collaboration and efficiencies from sharing services are key drivers of the consolidation. This landmark letting confirms White City as a major London sub-market and further cements its credentials as a creative hub alongside those of West London. Other occupiers in the area include the BBC, ITV Studios, Soho House and Imperial College London. CUSHMAN & WAKEFIELD 10 ROUND-UP