GPE wants to grow its flex space to more than 600,000 sq ft as lettings reach record levels.
The London-focused landlord and developer said it would allocate much of its £1bn development pipeline to flex and was actively scouting for new acquisitions.
GPE has also announced a new partnership with flex and co-working specialist Runway East, to run 20,500 sq ft of workspace at the Hickman, E1 (pictured).
In a leasing update this morning, chief executive Toby Courtauld said: “We start the new year with healthy levels of demand for high-quality spaces, particularly across our recently completed developments and our flex offerings. To meet this demand, we have started our £1.1bn development programme and are targeting to grow organically our flex offering to more than 600,000 sq ft.”
He added that GPE would supplement this growth through acquisitions, as demonstrated by last week’s purchase of 7-15 Gresse Street, W1.
GPE said it had signed 18 new leases and renewals over the last quarter, generating £7.3m in rent pa, of which GPE’s share is £6.4m. On average that is 8.1% ahead of March 2021 ERV.
Four rent reviews have netted the company a further £1.2m of annual rent, 6.9% ahead of the previous passing rent and 3.8% ahead of ERV. In total 114,400 sq ft of space was covered by new lettings, reviews and renewals for the quarter.
A further 25 lettings, totalling 91,000 sq ft, are under offer, delivering approximately £8m in rent to GPE. A further £31m is in negotiation.
Over the year to the end of March, GPE has signed 520,900 sq ft of new lettings, generating a combined annual rent of £38.5m, of which GPE’s share is £32m. The total is 9.8% ahead of March 2021 ERV, surpassing GPE’s previous record leasing high of £31.8m in 2016.
At the Hickman, Runway East will operate space across the lower ground, ground and first floors for 10 years. The profit share agreement will be in addition to Runway’s existing partnership with GPE to operate 48,400 sq ft of workspace at New City Court, SE1.
Simon Rowley, who became GPE’s director of office leasing and flex last month, said: “To attract customers to our spaces we need to provide greater choice. Our flex partnerships, complemented by our fitted and fully managed options, provide our customers with a broad range of spaces and a platform to grow with us. Today we have around 250,000 sq ft of flex space, and partnerships with specialists such as Runway East are an essential component of our flex offer, ensuring we are able to provide best-in-class spaces and services to a broad range of customers. We are both committed to leading the future of workspace in the capital and after working with Runway East on New City Court we are thrilled to be partnering with them once again for this project.”
GPE last month made a series of senior management changes to boost its flex business, including promoting Rowley from head of office leasing to director of office leasing and flex.
Portfolio director Steven Mew took on the newly-created role of customer experience and flex director, overseeing the group’s flexible office space activities and customer experience initiatives.
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