IWG snaps up WeWork office spaces in London and New York – ET RealEstate

BENGALURU: Office space provider IWG is set to open eight new shared-office centres in locations including London and New York, five of which were previously operated by its U.S.-based rival WeWork, as it seeks to meet the growing need for flexible work spaces.

Two of the former WeWork properties are located in Kensington, London, and Park Avenue South, New York, with three more in the Indonesian capital, Jakarta.

The other sites are in Chicago, Philadelphia, and opposite Penn Station in New York, according to a statement exclusively seen by Reuters.

IWC, owner of the Spaces and Regus brands, has said demand for such sites was up 14% in June from pre-pandemic levels. It will invest in refurbishing the properties.

IWG, which has its head office in Switzerland and more than 3,300 locations across 110 countries, added over 100 centres in the first half of 2021 through its franchise partners, three times as many as in the first half of 2020.

After a year in which the coronavirus pandemic shut office buildings and forced people to work from home, companies around the world are reducing their office space with an eye on trimming costs.

“The pandemic has accelerated the shift to the hybrid model by 10 years … There has been a rapid change,” said Mark Dixon, the boss of IWG.

“Office spaces in cities like New York and London are going to shrink in a post-pandemic world as some people move back to towns and countryside. It is hard to quantify by how much.”

From U.S. tech giants Amazon and Microsoft to banks such as Standard Chartered, firms have announced plans to adopt some form of flexible working model, typically having staff work from home for part of the week.

Dixon said there would be more change over the next three years as companies’ leases end.

“We are seeing a continuous interest in suburban and countryside locations as people avoid the commute and other hassles of a city life.”

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Kennedy-Wilson buys 1.5 lakh sq ft office building in London for $252 million – ET RealEstate

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BENGALURU: Kennedy-Wilson Holdings Inc said on Tuesday it had bought an office building in London for $252 million as it reshuffled its assets, betting on a rebound in workspace demand in the global financial hub, after the pandemic and Brexit hit property valuations in the city.

The U.S.-based real estate investment firm’s purchase of One Embassy Gardens, a 156,000-square-foot building in Nine Elms district, follows its recent sale of a central London office asset, Friars Bridge Court.

Office property valuations in London slumped as the pandemic forced employers to opt for shorter leases and more employees preferred remote working, while Brexit also led to some uncertainty over companies choosing London as their hubs.

Still, many commercial landlords including Land Securities have held on to hopes of a rebound, betting that many white collar workers will eventually return to offices once COVID-19 curbs are fully lifted.

“One Embassy Gardens…is set to further benefit from the ‘tech-clustering’ effect when Apple opens its HQ in 2022,” Kennedy-Wilson said.

One Embassy Gardens is part of the wider Embassy Gardens estate, a new riverside district adjacent to the U.S. Embassy and close to Apple’s new headquarters at Battersea Power Station.

Kennedy-Wilson said the off-market transaction was expected to add $12 million in annual net operating income.

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UK’s Workspace posts 235.7 million pounds loss in FY21 – ET RealEstate

BENGALURU: Workspace Group on Thursday slipped to its first annual loss in 12 years as COVID-19 battered occupancies and rents, with the office-space provider saying it would take a couple of years to recover to pre-pandemic levels.

Shares of the FTSE 250 firm fell as much as 3.6% after it said it lost around a tenth of its customers, comprising mostly small and medium-sized enterprises and entrepreneur businesses, in the wake of the coronavirus pandemic.

Employees and consumers were marooned at homes by lockdowns, while companies were forced to cut costs with few investing.

Workspace Chief Financial Officer David Benson told Reuters the company expects to see “significant” recovery this year after reporting a pre-tax loss of 235.7 million pounds for the 12 months ended March 31.

“Certainly over the next couple of years, we will be recovering back to where we were pre-COVID,” said Benson.

The London-focused company, which serves a varied client base from architects to florists and craft beer brewers to app developers, said a survey on future space requirements over the year showed that only 12% of its clients thought they would reduce space.

“Over 60% of them (clients) said they thought they would be taking about the same amount of space. 25% thought it would be taking more space,” said Chief Executive Officer Graham Clemett on an earnings call.

Annual net rental income plunged 33% to 81.5 million pounds, while the underlying value of its properties slipped 10%.

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UK house prices jump by 10.9%, could speed up further: Nationwide – ET RealEstate

LONDON: British house prices jumped by an annual 10.9%, the most in nearly seven years, and they look set to accelerate further as people seek new homes after the pandemic, mortgage lender Nationwide said.

Almost seven in 10 homeowners considering a move said they would be doing it even without the extension of a tax incentive by finance minister Rishi Sunak, Nationwide said, citing a survey it conducted in late April.

Shifting housing preferences were “continuing to drive activity, with people reassessing their needs in the wake of the pandemic,” Nationwide’s chief economist Robert Gardner said.

Tuesday’s figures are the latest to show the scale of the surge in house prices which hit a new record high at an average of 242,832 pounds ($345,355.67), according to Nationwide.

Bank of England Deputy Governor Dave Ramsden said in an interview published on Tuesday there was a “risk that demand gets ahead of supply and that will lead to a more generalised pick-up in inflationary pressure.”

“We are looking carefully at the housing market and a raft of real-term indicators,” he told the Guardian newspaper.

Nationwide said house prices were 1.8% higher than in April.

Economists polled by Reuters had expected prices to rise by 9.2% in annual terms and by 0.8% from April.

Nationwide said there was scope for annual house price growth to accelerate further in the coming months, given how weak the housing market was in early stages of the pandemic.

But if unemployment rises sharply later in 2021 – when Sunak’s jobs protection programme is due to expire – there was scope for activity to slow, perhaps sharply, it said.

Less timely but broader official data from the Office for National Statistics has shown that house prices in March jumped by just over 10%, the largest annual rise by that measure in nearly 14 years.

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