Q1 2024 Update from Jonathan Vanstone-Walker, MD

By Jonathan Vanstone-Walker
Projects • Thoughts
5th March 24

In mid-February, I returned from a 5-week trip to Asia, yet I didn’t feel like I missed much in the market.

It was a quiet-ish start to the year, and while agents reported plenty of viewings, deals are taking ages to complete. People are a little commitment-phobic at the moment for some reason. That’s my experience too when I’m doing consultancy work – in fairness I can see how difficult it is to make long-term plans with all the debate around RTO and WFH.

London’s office vacancy rate is still 9% and is slowly ticking up.

Offices are still either ‘the best’ (doing well, fully let) or ‘the rest’ (struggling and empty). CoStar tells me there is nearly 40m sq. ft. vacant in London. This can’t all be converted to residential, so what can we do?

Japan might have the answer

One of the things I noticed in Tokyo was multi-use buildings like this everywhere:

They looked like office buildings to me but with a crazy mix of tenants. One might have a bar in the basement, a restaurant on the ground floor, or (best example) a micro pig café on the 2nd floor.

My own experience of going to one was a visit to a cocktail bar I’d read about in a guidebook.

The building was ugly and way ‘off-pitch’; it looked like something from a Croydon backstreet – I even walked past it twice because it was so unassuming. The entrance was past a greasy-smelling restaurant, up in a creaking lift that opened onto a dark outside stairwell.

But when I arrived the place was packed-out, fully booked all night, and taking reservations for the next week only!

It made me wonder whether this is where secondary offices are heading in the UK. We don’t really do mixed-use like this, and as rents fall and Class E gets going, I’m convinced we’re going to see it soon.

Back to TSP and what’s going on here

We had a busy end to 2023, having signed up two new clients who had just bought buildings. We also onboarded some new Managed Space clients who needed a full office set-up for the new year.

Managed Space is something we’re seeing much more demand for.

In our case, these are decent-sized corporates on 7k sq. ft. floors. They’ve just emerged from serviced offices after the pandemic – they want a ‘proper’ office but are used to the higher levels of service in serviced. Landlords under-provide Managed Space, but it solves a problem for customers, and that means good spaces can command a premium.

We just launched two buildings – 60 Ironmonger and 79 Clerkenwell

Both are fully managed set-ups and we’ve already had several viewings and proposals out on the floors despite the quiet Q1. Check them out, especially the salutogenic design from House of Grey.

Zac and Mia organised a photoshoot pre-Xmas that saw models flown in from Europe. When I arrived for the launch party it felt like London Fashion Week had arrived early: it’s not your typical commercial property marketing campaign.

What’s next

We’re heading to MIPIM next week and hosting lunches and dinners for clients and contacts. If you’re there too and want to meet, let me know.

It’s March, and that means the new TSP business plan will be launched soon. This year’s focus is on Managed Space, Asset Management, and hospitality (and growth obviously).

We had some entertaining customer service training from hotel-sector experts last year. Some of the practice phone calls were hilarious, and overall it was so helpful that we’ll be doing more this year. We’re also rolling out our WhatsApp concierge service across more of the portfolio.

We’ve also committed to another 5 years at our Tottenham Court Road HQ. So we invested by upgrading our workstations to the Muuto kit that we have in our buildings and buying a fig tree. There’s new low-level lighting which brightens the place up while creating a cosier vibe. The idea is to give our people the same experience as our customers – feedback is good so far.

Lastly, in April we’re having a staff party to celebrate 15 years in business. I am sure we’ll celebrate with our clients and friends too, and while I can’t promise another Zagroni cocktail kit, we will mark the occasion in the typical TSP style.

That’s all for this quarter’s update. If you need Japan travel tips, want to talk Managed Space, or need a new Property Manager – get in touch.

Wishing you all a prosperous Q2 ahead.

 

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