London: Can added space seal a sale?
Commercial construction is right back on track in the Capital with the volume of new-start office developments hitting its second highest level in 20 years. As part of this trend, maximising useable space is becoming an increasingly crucial factor in sealing letting deals, as the latest Deloitte London Business Footprint Report shows:
- Almost all letting deals for schemes under construction involve businesses taking on extra space for expansion.
- The most significant increases in letting deals were for large sized areas, with a 120% rise in deals over 100,000+ sq.ft in 2013, and continued year on year rises ever since.
With this in mind, can premium performance insulation help to achieve a significant difference in space in these properties to improve saleability as well as value?
Sweett Group investigated a 14 storey new build development in central London fitted out with a Cat-A specification at a cost of £63.45 million. As with a significant proportion of the properties which make up the 9.5 million sq.ft office pipeline for London, the steel frame building uses a ventilated rainscreen cladding system.
Sweett Group compared two façade system build-ups. Both hybrid insulation build-ups examined use an internal layer of glass mineral fibre behind a layer of particle board, however by opting for premium performance insulation instead of an outer layer of rock mineral fibre, the high performance option provides a solution which is 55 mm slimmer.
When totalled out across the full 14 floors this helps squeeze an incredible 126.50 sq.m (1,361.63 sq.ft) of additional useable space from the building envelope, which may make all the difference in securing leasing deals.
Whilst the premium performance insulation increased costs by £10.00 per sq.m, the additional space has a capitalised value of £1,530,151.00, representing a 791% return on the cost of the insulation and rental income alone from the space stands at £70,119.00 per year.
The next blog in this series will travel from the English capital to the Welsh, with an in-depth look at the thriving ‘Big Shed’ market in Cardiff. The blog will go live on the 11th of August.
If you can’t wait for the series to unfold and want to find out more, visit the real value of space website and download the whitepaper.
Read the whole of the Real Value of Space Blog series.
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