Quadrant Estates on redrawing London’s office market map

While a growing list of developers weigh plans to turn unloved offices into homes, in south-west London one has headed in the opposite direction, taking a plot once earmarked for residential and rethinking it as a workplace. The developer is Quadrant Estates and the scheme is OSMO (or Office Space Meets Outdoors) Battersea, a near-167,000 sq ft, 12-storey block between Vauxhall and Battersea Power Station. Quadrant and AIMCo bought the site from Royal Mail in 2020 – a time that already felt like another world in terms of the outlook for offices. Royal Mail had outline consent for residential development across the wider 14-acre Nine Elms Park site. But Quadrant founding partner Tristram Gethin and the team saw the possibility of something different there. The company had looked earlier at buying the nearby Palmerston Court site, now home to student accommodation run by Urbanest. The team lost out there, but with Apple taking an office pre-let at Battersea Power Station – a stone’s throw from Nine Elms Park – and a new Northern Line tube stop, the enthusiasm remained. Push and pull factors Battersea was “an opportunity”, Gethin says today. He adds: “A submarket which is going to have new infrastructure, new amenity – we thought there should be more office in that mix.” And so, some four years on from the Royal Mail deal, OSMO Battersea is close to completion. When EG visits the building in August, the entry barriers are still being tinkered with by an engineer but there seem few other boxes still to be ticked – except for filling the space. The first and second floors are under offer with a flex operator, and the two ground floor shops are being finalised. Discussions with potential tenants for the rest of the space are at an “early stage”, Gethin says. Knight Frank and Savills are running the show on that front. Gethin seems relaxed. Schemes like OSMO Battersea and Battersea Power Station are redrawing the map for commercial real estate in the capital he says. Push and pull factors, he believes, will work in Quadrant’s favour, and he is adamant that OSMO Battersea, with its building app, Wiredscore Platinum certificate, open spaces and variety of amenities – including a dog-walking service – will attract attention. “When you step outside the core London market, you have to go the extra mile,” he says. Why YY? Gethin and the team know a thing or two about changing perceptions of an area. Seven miles or so across the capital, Quadrant has turned the old Thomson Reuters building at 30 South Colonnade in Canary Wharf into YY. Earlier this year, financial technology company Revolut took 113,000 sq ft of office space there on a 10-year lease, upping its footprint by more than 40% from its existing nearby offices at Westferry Circus. Some tenants are leaving the Wharf, Gethin admits, but others are staying put. And journalists, he adds pointedly, are just not giving the estate the credit he thinks it deserves. “I think the press have been having a field day pulling it down, but what they haven’t majored on is the fact that if you go down there, footfall now is way ahead of where it was pre-Covid,” he says. “You’ve got 3,500 people who now live on the Wharf. Five years ago, no one lived there. With what’s being built there now, that’ll be 5,000.” Some of the problem is long memories, he adds. “The resistance to going down [to the Wharf] is our generation, not the young. The young like it,” he says. “My co-founding partner’s daughter works there and she loves it. It’s the old guard who remember it from 15 to 30 years ago who haven’t taken on board that it has changed.” Battersea is shifting too, he says – the long-awaited redevelopment of the power station assured that. Gethin wants OSMO Battersea to complement the larger scheme, talking of collaboration in the same way that Art-Invest and British Land have collaborated over their respective work at Canada Water. “We are very much working with them,” Gethin says. “We talk to the power station team all the time about what we are doing, and they’ve been here, we have been over there. We’re trying to help each other – bringing the whole area up is in our common interest. I think the fact they have got 3,500 people working there for Apple is phenomenal. “Battersea has not had that before – 500,000 sq ft in one hit is huge. The knock-on effect of Apple being here, the US Embassy being here, Penguin [Random House] being here and other tenants looking at this area is that the critical mass will draw others here.” Moving out But that will mean competition as well as collaboration. Quadrant had been trying to woo technology company SharkNinja away from its existing office in the power station to take a prelet at OSMO Battersea. However, the tenant stuck on the estate, instead agreeing to scale up to take space at 50 Electric Boulevard, an in-the-works office block on the power station grounds. Location will have weighed in the power station’s favour, Gethin says – “We are a much better building,” he says, as any developer with the requisite self-belief would. “But they are on the estate.” But OSMO Battersea is guiding rents at mid-£60s to mid-£70-s per sq ft, he adds, below those of Electric Boulevard. Those kinds of rents are drawing attention away from more established submarkets such as Victoria, Gethin says, where occupiers can pay £100 per sq ft for new space. It is a similar story somewhere like Canary Wharf, he adds. Revolut is understood to be paying between £62 and £66 per sq ft for its floors at YY. “With the lack of supply of grade-A space in the core markets, I think we will see that the likes of Battersea and Canary Wharf benefit from that,” Gethin says. “Here [in Battersea], the opportunity is to do a brand new building, with a new Northern line station right outside the door and with everything going on at the power station, and deliver a best-in-class building at a significant discount.” Where next for Quadrant? “We’ve historically been very busy in the City, and work closely with a lot of investors who like that market and want to do more there,” he says. “Prime West End is unlikely for us – that’s much more long-term family offices buying for the wealth protection. Outside the prime West End we have always liked places like Fitzrovia and Marylebone. Our sweet spot is in the 50-250,000 sq ft range in central London and then submarkets like Battersea and Canary Wharf.” Infrastructure is “essential”, Gethin says when discussing the submarkets he is most keen on. “I’m a massive fan of central London and we would always look at opportunities there. The Elizabeth Line is a really important addition to the city’s infrastructure, for a lot of companies in terms of where they want to be,” he says. “I don’t think we’d go any further out than Canary Wharf or Battersea.” Images © Quadrant Estates