DE&J Levy announces name change and HQ move

By James Buckley - Thursday, February 20, 2014 0:01

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Niche London agency DE&J Levy this morning announced a rebrand of the company which, with immediate effect, will see its name changed to ‘Levy’, as well as a relocation to Nuffield House in Piccadilly.

Levy will move from the 4,620 sq ft it occupies at Dukes Court, 32 Duke Street in St James, SW1, to 41-46 Piccadilly, W1, where it will take a lease from 1 March 2014.

The firm, which celebrates its 75th anniversary later this year, has been in its current offices for 15 years.

The rebranding comes as Levy, in conjunction with IPD, releases a new report into the performance of commercial property across London, which shows values in ‘fringe’ markets in the capital outperforming many conventional locations for investment – often off the back of London’s growing technology boom.

Traditional investors, such as pension funds and high net worth buyers from the Middle East and Asia, may favour assets in the City and West End due to their ‘trophy’ status, but, an emerging trend has seen peripheral locations across London gain serious momentum.

The Northern Fringe (Shoreditch and Spitalfields) delivered the highest returns in the capital last year, at 23%, with other peripheral markets like Camden (Kings Cross) and Paddington delivering 18.5% and 18.3% respectively – well above the London average of 14.2%.

The London Markets Report, published by IPD and Levy, is the first major study into the performance of 20 of London’s ‘micro’ markets – measuring over £42bn in assets across the capital.

It shows some West End real estate also delivered extremely high returns, particular the ‘NoHo’ district north of Oxford Street, which returned 19.2%, with Mayfair close behind at 18.5%. Despite major development activity, performance fell to 11.3% in Victoria. 

However, returns for the City, one of the largest London markets, were just 12.1%. Though returns in London have led the UK for the last six years, significant divisions are emerging across the different districts, resulting from changes in demand from tenants.

Facebook taking space at Euston and Google at Kings Cross are the most high profile names in a shift towards technology, telecommunications and media tenants – with these ‘new’ firms taking space acting as key levers for investor interest in ‘new’ districts.

Traditional areas are often seeing property performance buoyed by the sheer volume of international investment. With London continuing to benefit from its so-called ‘safe haven’ status, some yield driven markets see the strength of capital pushing up returns and values, regardless of asset performance. This is particularly evident in Mayfair. 

Comparatively, more peripheral markets, like Camden, and the Northern Fringe, have seen returns driven by strong rental growth and occupier demand.

This has important implications for UK based investors driven out of central London markets as international investment drives down income yields.

In Mayfair and Soho, the most expensive markets in the capital, real estate income returns are now just 3.6% and 3.7% respectively, generally too low for investors looking to property to secure income streams.

However, in the Northern Fringe income returns jump to 6.1%, and in Paddington, Camden and other peripheral areas they are generally around 5%.

Phil Tily, executive director & head of UK and Ireland, IPD, said: “London is the single largest real estate investment location in the world, but it is all too easy to forget the massive difference in performance from one district to the other.

“Although high levels of interest from cash-rich investors has edged out traditional funds, who are more focused on strong income returns, many locations still benefit from strong tenant demand – after all London remains the power house of the UK economy, and as such there are new areas of demand emerging across the city.”

Simon Heilpern of Levy said: “London is undergoing a renaissance with the impact of transport, particularly Crossrail being at the core of current development activity. As travel times diminish London is expanding rapidly into peripheral areas that are illustrating the strongest total returns from their modest traditional base values.

“In depth knowledge of the 'micro' markets is essential to identify the locations that are most likely to provide optimal investment performance.”

jbuckley@costar.co.uk

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