Think of what the occupier wants. That’s the advice Shiraz Jiwa has drummed into colleagues since opening the doors at real estate investment firm the Valesco Group. Now, as the firm moves into its new offices in London’s Mayfair, it’s time to put its own lessons into practice.
Valesco isn’t moving far – about 500 yards around the corner from 11 Bruton Street, W1, to 25 Berkeley Square (pictured above). But the shift speaks volumes about the firm’s ambitions for growth, as well as what Jiwa and his team believe a modern office should offer, whether they own it or occupy it.
The firm has taken a 10-year, no-break lease on a 6,000 sq ft floor in Lazari Investments’ Berkeley Square development and expects to move across in the coming weeks, joining big-name tenants including the Abu Dhabi sovereign wealth fund, Mubadala.
The scale of the new space signals some significant expansion plans compared with the company’s existing premises on Bruton Street, which measures roughly 1,000 sq ft.
The Berkeley Square building – originally built in 1906 and designed by architect Frank Verity – has been redeveloped behind its original facade and has achieved a BREEAM Excellent rating. Valesco’s fit-out will be net-zero carbon, zero waste to landfill and has achieved a gold standard under the RICS’s SKA environmental accreditation.
That focus on the ESG agenda has long been front of mind for Jiwa. Guided by CBRE, the firm spent some 18 months searching for the right home. “Why? Because we wanted to find something that is synonymous with our views and our philosophies on such things as ESG,” Jiwa tells EG. “But we wanted to find a BREEAM Excellent or higher.” And those, he adds, are few and far between.
Indeed, a two-tier office became apparent during that hunt. The chief executive thinks he stopped counting how many sites he had seen somewhere around the 35th viewing. “There’s a tremendous bifurcation between the top-quality space and the lesser-quality space,” he says. “I almost feel now that the definition of grade-A has to change, or we need to create a grade-A-plus.”
The company has built a €2bn (£1.7bn) portfolio over the past three years, achieving a 20% valuation uplift across assets that include London’s Cannon Bridge House, EC4, Microsoft’s Reading headquarters and Amazon’s HQ for central and eastern Europe in Bratislava.
Jiwa, a former Morgan Stanley investment banker and private equity executive, hopes the firm can build that portfolio to €5bn, then €10bn and beyond. And the new home could help it on that journey – another lesson learnt from the day job.
“We started moving away from space being a cost centre, to space being a revenue generator,” says Jiwa of the shift in occupiers’ focus that he has seen as a dealmaker.
“Ten-plus years ago, when you were dealing with tenants on new leases or lease extensions, you were always discussing these with CFOs, and they were fixated on price per square foot. Then I started dealing with board members, heads of people. [They thought] ‘that space is going to allow me to bring in the best-quality talent that I’m going to be able to commercialise because they’re going to be more productive’. That drives rents and capital values, and it’s a virtuous circle.”
Jiwa will hope that 25 Berkeley Square has a similar effect as a revenue generator for Valesco, attracting new colleagues and clients. “I think [the new office] is massively correlated to franchise value,” he says. “It underpins the accelerated trajectory of the business. That’s what the space says.”
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