With an ever-increasing number of office schemes in Hammersmith, the borough could benefit from improved amenities. Philip Smith reports
Architect Lord Rogers wants to see more mixed-use development in city centres – and Hammersmith could well prove his point.
Many spectacular buildings – most notably the Ark, home to Seagram – show up on the skyline, and a range of new-build and refurbished projects are close to completion but the surroundings still present a very unglamorous image.
The number of finished offices seems ever increasing. Frogmore has completed the 1,858m2 (20,000 sq ft) Argentum on Hammersmith Road, in which business centre operator HQ has shown an interest. Argyll’s refurbishment of the 3,716m2 (40,000 sq ft) Saros, also on Hammersmith Road, is available – though rumoured to be a target of Healey & Baker’s client, Global Telecom Systems.
And Derwent Valley has let over 70% of its refurbished 5,388m2 (58,000 sq ft) Hythe House, on Shepherd’s Bush Road, to Swiss Air Group and Computational Dynamics. Healey & Baker and Pilcher Hershman are joint letting agents on the deal.
Key sites in need of upgrading
Knight Frank partner Alistair Elliott believes that Hammersmith could benefit from more amenities. He says that although infrastructure is first class, key sites – such as the entrance outside the District Line tube station – are in marked contrast to the high quality of office developments in the area and require upgrading.
But changes are on the way, as both Elliott and Charles Dady of Healey & Baker highlight. For example, THI’s proposals for a mixed-use scheme – incorporating a multiplex – on London Transport’s site will improve the Beadon Road frontage of the tube station.
Also, Elliott’s client at Hammersmith Embankment Office Park is another seeking to rectify the perceived imbalance. Developer Landmark and Barclays are soon to submit a new planning application for the 37,160m2 (400,000 sq ft) second phase, which includes proposals for a 200-bed, four- or five-star hotel, and possibly a gym at a later date, with river frontage.
Although WWAV Rapp Collins has taken a 6,192m2 (66,654 sq ft) prelet on the first phase, the scheme has recently suffered a blow. Having put the just-completed 11,613m2 (125,000 sq ft) The Waterfront office block under offer, Ico Global decided against a major relocation.
“The Waterfront is still available,” confirms Elliott – and, regarding rents, adds: “It is fair to say that the £32.50 per sq ft that L’Oreal is paying is the benchmark for Hammersmith.”
According to CB Hillier Parker’s latest Western Corridor Office Market report, the highest rent achieved on a self-contained building in the Western Corridor was in Hammersmith, thanks to L’Oreal.
The cosmetics group, which had initially targeted the West End, is paying £350 per m2 (£32.50 per sq ft) for a 15-year lease on the refurbished 10,005m2 (107,700 sq ft) Focus West. L’Oreal is thought to have 14 months rent-free.
And that also gives confidence for further rental growth, says Elliott. “At the height of the last cycle, rents were around £35-£37 per sq ft,” he explains. “There is still a sound basis for growth and, if the West End continues going the way it is, Hammersmith will look increasingly competitive.”
Secondhand rents on hold
However, Jones Lang LaSalle’s Guy Lambert strikes a note of caution. “While Standard Life has created a record rent in this latest wave of development at Focus West, rents in the secondhand market have shown little growth because there has been a flood of good-quality, secondhand and refurbished accommodation which came to the market during the latter part of last year.”
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Brentford Agents predict transformation of the Great West Road Samsung’s loss has been SmithKline Beecham’s gain. SKB swooped on the Korean electronics giant’s site in Brentford after Samsung cancelled plans for a new European headquarters following the financial crisis in Asia. Early last year, Samsung put the 3.6ha (9 acre) plot beside the A4 Great West Road on the market through Jones Lang LaSalle. At the same time SKB – unconvinced that it could get suitable accommodation at Heathrow’s Stockley Park in time to meet its own deadline – was looking for an HQ. The deal with Samsung and joint landowner P&O was finalised last May, and SKB is now building its own 73,391m2 (790,000 sq ft) headquarters on the site. “With the planning consents behind us, SKB can get on with the hard work of building an office facility that will project the correct image for the company and create the best working environment for our employees,” says Dan Phelan, senior vice president and director at SmithKline Beecham. Brentford coming into its own Traditionally in Hammersmith’s shadow, the impetus generated by the SKB development is pushing Brentford into the limelight. According to Weatherall Green & Smith, take-up last year – boosted by SKB’s move – hit 56,944m2 (612,960 sq ft). “It will transform the market,” says Michael Pearce of King Sturge, project manager on the SKB development. “It may take time for the full effects to be felt, but it will happen.” Guy Lambert of Jones Lang LaSalle agrees: “The development of SmithKline Beecham’s HQ will totally transform the location and I would expect this to attract a number of other companies to the area.” Robert Cregeen of Weatherall Green & Smith adds: “Companies recognise the merits of Brentford as a strategic office location being close to Heathrow but with rents at a discount to Hammersmith.” Lambert also spies the market’s potential. “Brentford does have a number of infrastructure problems,” he says, “but it remains good value compared to Heathrow and Hammersmith, where rents can be £8-£10 per sq ft higher.” Key deals in the past 12 months, says Cregeen, include leases for 4,645m2 (50,000 sq ft) in the Data General Building and 3,716m2 (40,000 sq ft) in Great West House, taken by Ralph Parsons. And BSkyB has taken a 20-year lease on 6,678m2 (71,888 sq ft) at West Cross House at £205 per m2 (£19 per sq ft). However, Knight Frank’s Elliott believes Brentford can go further. “The concern that I have is that it has become slightly barren,” he says. “It needs a gutsy developer to get in there and look at the market on a broader basis with a decent mixed-use scheme, like Brindleyplace. “It needs office development, but also amenities, better public transport and speculative development. There is the site land available.” He adds: “There should not really be constraints on height and there are tube lines running nearby. And schemes will be high profile because of the location. It is the gateway to London.” Site viewed as gateway into London Ironically, Chelsfield appears to be thinking along the same lines – the potential 14,864m2 (160,000 sq ft) development site Paragon is being renamed London Gateway. As Damian Lambourne of Rogers Chapman, which is marketing London Gateway with Michael Elliott & Partners, points out: “The main focus in Brentford at the moment is a land supply capable of supporting some 278,700m2 (3m sq ft) of offices. “A good part of this benefits from existing planning consents granted when car-parking ratios were 1:30m2, rather than the current 1:50m2 standard now being adopted in the M25 markets.” Not only that, if things settle down in Asia, Brentford might be able to look forward to Samsung’s return with a European HQ. Despite the sale of its site on the Great West Road, a spokesman for the electronics giant says: “We’re really talking about the early 21st century now, but we would like to stay in the borough. We’ve got existing operations there and it’s near Heathrow.” |
