Manchester Castleforge Partners is a private equity real estate investment firm based in London, UK that has invested approximately 1 billion of asset value throughout the UK and Europe. When doing like-for-like comparisons of serviced office product, one of the most interesting things we have found was that while serviced office as a product is far less developed and sophisticated on much of the continent when compared to UK regional cities, the serviced office desk rates are often higher than they are in UK regional cities. Compare this to our latest discussion on a turnkey half floor in the same building at 27 per square foot with virtually no rent abatements on a three-year lease, so still about 27 per square foot net effective, resulting in a 50%+ gain on net effective rent. When you factor in that borrowing margins and the bank risk-free rate are both lower, the degree of positive leverage for serviced offices on the continent begins to look much superior to that achievable in the UK regional markets. Castleforge Partners has acquired four UK sites for a 175m (192m) office development. Though weve grown, weve maintained that spirit which allows us to be thoughtful, rigorous and innovative in our approach. A Returning Opportunity in the London Office Market? Castleforge Partners purchased the 197-bedroom hotel, located in the heart of the capital, from a private owner who had owned the hotel for 14 years. Prior to this, Lerche was Director of Asset Management at Cording Real Estate Group where he managed multiple office assets across Germany, and Partner at real estate debt fund Bright Capital. While we believe the offering is increasingly attractive to a variety of tenants (discussed in detail later), the typical business model possesses numerous potential risks, primarily because typical serviced office operators lease their, For those of you who attended our annual meeting, which was held in London on May 9th, you will know that we spoke in some detail about the three main pillars of our investment strategy: vertical integration, thematic investing and operational enhancement. Flexible workspace provider Clockwise will manage the sites to "deliver a positive experience for occupants and attractive returns for its investors". We did finally have the opportunity in 2017 to carry out the main idea of our original business plan by converting a section of the empty office space in Savoy Centre, Glasgow into a serviced office product. We believe that this rise in construction costs has led to a secular increase in the equilibrium level of rents across the property spectrum as the replacement cost of buildings has increased. Our vision is for a future in which every work environment and experience has a positive impact for people, places and the planet. Castleforge has been repurposing parts of its existing UK portfolio as serviced space since 2018. PROPERTY investment firm Castleforge Partners has announced the acquisition of its first office building in Germany, in the historic old town of Bremen. It has now begun acquiring new premises,. To date, Castleforge Partners have invested over 500 million of asset value throughout . Developer Castleforge Partners is this week offering 70,000 sq ft of office space in Liverpool's Royal Albert Dock. Clockwise will cater to businesses of all kinds, ranging from freelancers to SMEs, whilst also regularly hosting . Until the fourteenth century, silk was mainly imported from Asia. At the heart of Southampton's Business District, this prominent office building boasts occupiers such as Savills, Mott MacDonald, Norweigen Cruise Line Group, Benefex, Hays, Clockwise, Rubix Business System, VOA, Health Care Resourcing Group and Ocean Network Express. Belfast, 100,000 sq. Hawkins\Brown. Moreover, few have tens of thousands in cash lying around to easily pay the upfront costs to fit out an office, especially considering that this space may become obsolete faster than anticipated if the tenant undercooks their internal growth estimates. "We have loved working with Clockwise and Castleforge Partners to breathe new life into this beautiful heritage building," comments Linda Morey-Burrows, . It has occurred to us that planning risk, Whilst there may be an affordability crisis in relation to the price of housing for sale, there is not the same crisis in relation to rental prices, particularly outside of London. We note that recently, Ernst & Young (E&Y) announced that they are looking to increase the proportion of flexible offices in their estate from 10% to 30% in the UK and Ireland. We also keep in mind that Clockwise is not one fits all solution, and so we are careful to select the type of buildings and locations that best suit this offering while also limiting liquidity risk on exit. An office to call their own, great for an SME who needs to work at pace and express their company culture. These facilities are available to the public as well as Clockwise members and creates an additional revenue stream for the Client.. A couple weeks ago,, As we have discussed in previous letters, over the past 20 years the UK property industry has seen a substantial rise in construction costs, which has lead to a large and sustained increase in the replacement cost of buildings. Be the first to find this review helpful. We recognise that we need to advance our sustainability maturity and put a series of key enablers in place. Pros. M2 1DH, We use cookies to provide you with a great experience and to help our site run effectively. Brandon Hollihan, Founding Partner of Castleforge Partners said: We are thrilled to welcome Christian during this exciting period of growth for Castleforge. You can unsubscribe or manage your preferences at any time. Clockwise Brochure. Serviced Offices, Co-working & Meeting Rooms | Clockwise Traditional leases Longer commitment - leases lasting an average of three years Large initial investment in CAPEX Project management required Lag between signing to move in Running costs and utilities paid separately, multiple suppliers and management required Strive towards zero waste and use of sustainable materials, by embedding circular economy principles into the way we design, operate and maintain our spaces. in 2019. Website. This website uses cookies. As Castleforges sustainability strategy develops, we will work closely with them to align our approaches wherever possible. Linesight has been providing full cost consultancy services on the . His experience will be instrumental as Castleforge looks to expand its reach across the German commercial market, with further purchases to be announced over the next 18 months. Well make sure everything works, so they can do their best work. The building will be fully refurbished to enable . Provide spaces and services that enhance the productivity, health and wellbeing of colleagues and members. Please enter your username or email address to reset your password. Will Influencers Be The New Recruiters In The Future Of Work? This first iteration of our Positive Impact Strategy details our pledge for the future and as our business grows, so will our approach. For more information visit www.castleforgepartners.com. Moving forward, for many companies flexibility is going to be key when it comes to office space leases. Core, 30 Brown St The firm has identified a clear investment opportunity in so-called secondary cities across the country and will look to expand its reach across the German commercial market with further purchases to be announced over the next 18 months. We invest in real estate located in and around select UK and European cities. Even if we charge a higher rent per square foot, this is still a more cost-effective option for the larger tenant versus taking on a longer-term lease for more space than required, just in case they need more in the future. We draw on insights from economists, historians, and urbanists to try to understand why some places thrive, why other places flounder, and why the fates of particular places evolve over time. Welcome to IPE Real Assets. We implement green energy and recycling practices. Higginson Strategy organises a number of exclusive events for clients and friends over the course of the calendar year. Through our flexible workspace provider Clockwise, we are very well positioned to offer this type of bespoke service to our members.. This attention to detail dovetails with the services that PMP provided to deliver Clockwise Commercial Quay for Castleforge Partners. Serviced Offices & Meeting Rooms in Cardiff | Clockwise Book a meeting room Member Login Our Neighbourhood Residing at the top of the high street, Clockwise Cardiff benefits from being right by some of the city's best restaurants and bars. Property investment firm Castleforge Partners has announced a significant expansion of its UK operation with the acquisition of four major office spaces across England. Core, 30 Brown St We revitalise heritage buildings and local landscapes. Spaces that are perfect for a discussion with your board or a workshop with the whiteboard. From modest beginnings in Glasgow, we currently operate a number of locations up and down the UK with many more openings in the pipeline. And it worked. Lerche brings 20 years of experience in the real estate sector, leading value-added asset management for a range of private equity and international [] How Will The Line Change The Future Of Work? Our collective knowledge and experience, including input from development management, asset management and operations, is brought to bear in each investment decision. As landlords, this ability to provide both traditional leases and flexible space in the same building has served us very well, and sure enough this same tenants interest was piqued, and they are seeing what By continuing to browse our site you agree to our. What Is The Impact Of Hybrid Working On Space Optimization? Affordable housing Europe: Should investors be part of the solution? We are a UN PRI signatory and a GRESB participant. Castleforge | 1,896 followers on LinkedIn. Since launching in 2017 we've made it our business to anticipate the needs of our members and their companies from day one. Clockwise provides well-designed, contemporary private offices, shared workspaces and meeting rooms with a focus on attention to detail. This strategy was proposed by PMP to allow our Client to maximise their investment as early in the development as possible and allow them to market the offices to attract new users and members and showcase the best of the Clockwise offering at the earliest opportunity. To receive priority invites and tips on how to communicate purpose please add your email. What are the benefits of a serviced office rental? Biophilic design and employee wellbeing has been prioritised throughout the design by bringing nature into the heart of the project. If economic fundamentals continue to soften, liquidity problems could turn, The London-focused office REIT Great Portland Estates (GPE) recently made an announcement that caught our attention. PROPERTY investment firm Castleforge Partners today (November 13) announced the acquisition of Broadwalk House, a corporate office building in Southernhay Gardens, Exeter. This attention to detail dovetails with the services that PMP provided to deliver Clockwise Commercial Quay for Castleforge Partners. Across Europe and the US, real estate markets are strained today to a degree that we have not observed since the global financial crisis (GFC). If economic fundamentals continue to soften, liquidity problems could turn Market Commentary He is also a former Director at Tristan Capital Partners. In April 2019, it was announced serviced office provider Clockwise would be the first occupier at the project. Bremen has a thriving economy, with a generation of young professionals and start-ups who are increasingly seeking flexible-office models as opposed to the usual traditional offering. Over the last few quarters, borrowing costs have surged, and liquidity has started to evaporate. Clockwise provides contemporary private offices, shared workspace and meeting rooms with flexible membership plans in key business locations. How Africas Economy will Harness Digital Tech in the Future of Work, Flexible Work and Investment in ESG are Driving Profitability for this Global Brand. Over the last few quarters, borrowing costs have surged, and liquidity has started to evaporate. Well start by laying out that narrative, since it is crucial to understanding the rise, Our 2021 white paper takes up a very basic question:why do people live where they do? Instead, we offered them space in our other building at 58 Waterloo Street nearby on a three-year lease. . The business plan worked so successfully that while we originally only fitted out approximately 30% of the office building as a Clockwise trial, we are now converting the majority of the office tower to Clockwise serviced offices. The real estate firm announced the purchase of Linley House on Friday, with the 68,000sq ft Dickinson Street site estimated to hold a gross development value of over 30m. The off-market transaction was arranged by Eastdill Secured. For example, Mike led the discussion that saw 160 Aldersgate leased to DLA, We recently read with some amusement and amazement an article in a UK property industry magazine, using research contributed by a UK property company, about a new way we should all be looking at office demand: net absorption. It is therefore often helpful to draw parallels to previous market cycles as a way to help us understand what may be happening now. Status: Complete. By continuing to use this website you are giving consent to cookies being used. Our experience has shown us that most smaller and medium-sized enterprises, especially in UK regional cities, are not tech and software businesses that grow from two to 200 employees overnight.