According to the latest survey by leading built asset consultancy EC Harris, getting funding has become challenging and tenant demand is falling off.

There are 150 projects in the pipeline that could together deliver office space totalling 53 million square feet in the next four years, with the total construction value pegged at £12bn. Of this, the City makes up 60 per cent or 34 million square feet of office space.

These development projects have been moving forward to address the lack of 'grade A' office space. Moreover, leases that cover about 70 million square feet of office space in London will be expiring before 2017.

But the Eurozone crisis has made potential tenants less optimistic and tightened funding markets. This means that tenants are more content to wait and watch what happens before committing to a lease. Quite a few are also favouring refurbished offices over new ones.

Pre-letting in particular is posing to be a big problem for developers. Pre-letting an office building basically involves leasing it before the construction on the building is complete. A few big companies have pulled out of pre-lets, leaving developers in the lurch. 

Developers without joint venture partners are only depending on pre-lets. If they cannot find alternate funding sources, getting projects will be an uphill task.

According to the latest Investec Entrepreneur Confidence Index, a significant number of entrepreneurs in the UK don’t expect the economic climate in 2012 to improve.

Just 13 per cent were hopeful of a better year ahead while 39 per cent felt that the economy could deteriorate slightly. One in ten expected the economy to take a turn for the worse. Thirty-one leading entrepreneurs took part in the survey; together, their business turnover is about £1.3 billion.

This lack of optimism and confidence is the lowest since the Index first conducted a survey back in December 2009. During that time, 64 per cent of entrepreneurs believed that the UK economy would witness an improvement while just 18 per cent felt otherwise.

While the economy is clearly a concern, the entrepreneurs have better expectations from their businesses. All thirty-one surveyed said that profits would grow this year, with one in every four entrepreneurs forecasting considerable growth. 

Investec said that entrepreneurs are typically optimistic about their enterprises and often spot opportunities when the economic climate is weak. This is evidenced by the fact that close to 50 per cent of entrepreneurs admitted to having acquisition plans in 2012 while 84 per cent preferred to grow their enterprises organically. 

And it was interesting to note that cost-cutting was not on entrepreneurs' minds, with only 15 per cent expecting to make cuts. More than 50 per cent, on the other hand, were planning to increase their R&D investment during the year.

 As the office take-up by companies in the banking and financial sectors has dropped off in the present economic environment, developers are being forced to explore new options that allow them to realize a return on their investment.

As close to 50 per cent of office space in the City is over 15 years old, it does not fall in the 'prime' category, making marketing quite a tough task. According to Deloitte LLP's research team, developers will continue to look at alternative uses of unoccupied office buildings in the City of London. Some of the country's leading homebuilders, including Berkeley and Axa Real Estate have development and renovation plans in the pipeline.

A way of improving the value of old office buildings is to convert them to residences. For instance, the values of homes in the vicinity of St. Paul's Cathedral are up to 15per cent higher in comparison to equivalent offices in the same area. As far as home prices are concerned, City of London attracts £650- £1,350 a square foot. Knightsbridge, Belgravia and Mayfair lead the list of 'highest price per square foot' in the capital city.

The gloomy economic climate and the low levels of office letting could impact office rents and values. JPMorgan Chase expects rents to fall by 4 per cent to 6 per cent this year, while office property values are forecasted to drop off by almost 7.3 per cent.

Technology venture capital group MTI has partnered with the Universities of Edinburgh, Manchester and the University College London to launch the Orion Fund. Its objective is to raise £150m to assist start-ups.

This is the biggest investment fund value of its kind being offered in the UK. The potential of tech innovations submitted to win the funds, will be evaluated by the UK's top universities. Some will also get pre-seed financing help to test their business viability.

The seed funding amount, starting from £250,000 to up to £750,000, will be made available to thirty-five of the UK's top tech innovations. At a later-stage, the lucky few businesses can bid for million dollar investment amounts (£3m to £5m) as well!

Efforts to raise investment finance for the fund are on, with the capital being accumulated from family offices, insurance societies and pension funds. Joining the fund-raising efforts will be four well-known investors, who will leverage their networks to support the Orion Fund in any way they can.

Writer and businessman Sir Richard Heygate said that while the UK doesn’t lack in the innovation department, it has been slow in transforming creativity into successful and world-class businesses. He believes that the fund will create much wealth for the country and its investors.

The Orion Fund is a good opportunity for technology innovators to get the all-important seed funding that is necessary to launch their business. It is heartening to see that the country's start-ups are receiving support from different quarters. 

On the one hand, the domestic economy has been affected by the fiscal squeeze much more than anticipated. On the other, the London Olympics and Bank of England's asset purchases could be a silver lining and boost confidence in the office sector.

This is the view of Jones Lang LaSalle analysts who most recently discussed their expectations for the country's office and retail space market. They said the performance in the first six months would be largely flat and may even dip slightly. However, prospects for the second half will be bright and the general sentiment would be positive.

Though employment numbers would most likely improve, the slower pace of growth in the public and financial sectors will lower the demand for office space. What this means is that occupiers would wait on until the economy picks up a bit before making important decisions on office space investment. Until such time, leasing activity will be subdued, with businesses focusing less on space expansion and more on cost-cutting.

But supply will drive the regional office space sector. The market has been seen to react positively to quality space and the right pricing, but currently, there are few such opportunities. New offices may attract more demand if there are operational and financial advantages for businesses. And the current demand for secondary office space is reasonable at best.

It is to be seen if Jones Lang LaSalle analysts' market expectations come true as the year unfolds. The economy back home and the Europe debt problem will have a major influence on the level of investment activity. 

An ICAEW study shows that firms are planning to hold back on their investment plans and are less confident about growth prospects. A major reason for this is that banks have slowed their lending to small and medium sized businesses.

With banks being wary about lending and small business confidence at a low, analysts feel that a recession-like environment could be on the cards. To offset this, Bank
of England is considering handouts amounting to £50bn. A few of the country’s monetary policy committee members are concerned with the current state of affairs, and have admitted that they would vote in favour of quantitative easing measures to tackle the problem.

There is also the Eurozone issue to be considered; to this end, economists have called upon the European Central Bank to provide monetary breathers as a solution to escalating unemployment and public spending cuts. It is expected that the bank may further lower interest rates to attract investment and decrease borrowing costs.

However, though confidence remains low, the pace of recruitment among small and medium businesses in the UK has been steady. In fact, 2011’s fourth quarter witnessed the fastest hiring pace in four years. Also, the likelihood of smaller businesses hiring workers this year is greater in comparison to their larger counterparts. The monetary policy committee will meet this week to decide how to hold up the economy; the country’s small business sector can only hope for the best.

As the financial services sector downsizes in the current economy, there is understandably a corresponding effect on the property market as a result of this. 

However, even as the office take-up in London is falling in the wider market, it is being balanced by the increasing take-up by IT, internet and telecom start-up companies. 

In fact, technology companies doubled office take up in central London last year. This marks a big step up in occupation, from 640,000 square feet in 2010 to 1.3m square feet in 2011.

While Old Street has been the favourite destination of technology companies for the past ten years, many have started exploring options in other areas of Central London. Google, for instance, has built a presence in Covent Garden while major daily deal website Groupon has taken up 43,000 square feet in The City (this formerly belonged to Bank of America Merrill Lynch). Nokia is also planning to make Paddington its UK headquarters.

The government has been trying to develop east London as the Silicon Valley of Europe by offering investment incentives and cutting red tape for tech start-ups. Many European entrepreneurs prefer to have a presence in east London as they view it to be an ideal place for recruitment and financing. The area’s creative air is also its USP, attracting many businesses to this part of the city.

ACC Liverpool will play host to the country’s aspiring entrepreneurs and some world-famous business leaders, including Sir Richard Branson, former Tesco CEO Sir Terry Leahy, and lastminute.com co-founder and the country’s ‘digital inclusion champion’ Martha Lane Fox.

At the event’s pre-launch, StartUp Britain co-founder Michael Hayman described the event as a revolution of sorts not just for the attendance by 42 brilliant entrepreneurs but also the opportunities that such an interactive platform would offer emerging businesspeople. Over the eight-day meet, 40 different events will be organised, and include a few fringe events as well. The event’s waterside-and-ferris wheel setting will be fun and celebratory.

One of the events that rising entrepreneurs can make the most of is Ideas Space, where they get the opportunity to pitch ideas to top venture capitalists. The potential for networking, building contacts and getting business at GEC is massive. Budding entrepreneurs can take away a lot from the Congress – even just listening to some of the world’s most respected business honchos can broaden horizons, help view things differently, and build knowledge base.

Hayman said that the GEC represented the kind of entrepreneurship-driven economic recovery that the government has been encouraging. He added that in this case, established entrepreneurs would take the lead in helping aspirants learn how to set up successful businesses, drive growth, and give the economy the big boost it needs.

It was part of the government’s initiative to encourage entrepreneurship in the UK and provide financial assistance to budding businessmen. However, the feasibility of this plan and its implications for the office market are being evaluated by business leaders and property lawyers.

By offering office space at cheap prices, the government will be directly competing with both private sector companies and public schemes for start-ups that are funded by local councils and universities. Another issue is that the government will have to secure permission to revise the lease agreements from building landlords.

The government’s proposed program may not be welcomed by landlords, according to property lawyers. They argue that landlords may not be willing to modify the terms of the lease agreement if there is no financial benefit in it for them.

So, when examined pragmatically, Cameron’s scheme, though well-intended, may face many hurdles. In fact, Cameron himself admitted that this isn’t something the government would quite like to do, but believes that it is essential as start-ups are critical contributors to economic growth.

Downing Street didn’t confirm details of the scheme or if the government was ready to offer the 300 shortlisted buildings to entrepreneurs as part of this initiative. But a spokesperson said that there were a number of potential buildings that could be used, and that the government had begun talks with landlords. 

Of late, the Prime Minister has focussed his attention on SMEs in the UK and promised to give them the support they deserve as important contributors to national wealth and employment.

The ‘Business in You’ program, in partnership with StartUp Business, a web platform celebrating entrepreneurship, has been launched to encourage the country’s small business enterprises to work towards further growth, and motivate aspiring entrepreneurs to set up their own business. This initiative is based on the concept that within everyone, there lurks a business, and a potential for great success.

Through the real-life stories of nine successful UK entrepreneurs from different backgrounds, the campaign aims to tell Britons that they too can have profitable ventures if they direct their energies and talents whole-heartedly into their endeavours. The campaign’s inspirational business ambassadors include Huddle’s Alastair Mitchell, moo.com’s Richard Moss, Ella’s Kitchen founder Paul Lindley and SBTV founder Jamal Edwards.

The campaign will, among other things, advise potential entrepreneurs on how to set up their business, through webinars, workshops and video tutorials. Topics such as funding and mentoring will also be discussed. Cameron has promised to provide nearly 300 underused and vacant government offices to entrepreneurs who are finding it difficult to access workspaces to launch or develop their businesses from. 

Eclipse Internet is a small ISP that specialises in providing business broadband, which means you'll get heightened levels of customer service as well as some really interesting and innovative products aimed squarely at the business community. 

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While it did not mention the reasons why the market struggled, nervousness about Britain’s economy in the light of the Eurozone crisis and unemployment concerns may have prompted a weak office space take-up among businesses.

City centre take-up in one of the UK’s top cities fell from 1.3 million square feet in 2010 to 700,000 square feet in 2011. It is also below the ten-year average of about 900,000 square feet. The numbers for South Manchester were better, but the north- west did not fare any better. 

The fall in demand among occupiers and a surplus of available space was to blame for north-west Manchester’s poor performance. The interest in and enquiries about office space openings from prospective tenants was also lower last year.

While crucial decisions on the Eurozone debt woes are still to be finalized, back home, the joblessness worries have risen. According to the latest figures, unemployment in Britain saw a rise of 118,000 between September and November.

The current joblessness levels are at their seventeen-year high, and this has some bearing on the office space market. So, while it can be argued that global investment in UK commercial and office property remains robust, UK-based businesses are thinking twice before investing in new offices.

However, office space agents, while admitting that 2012 will be a challenging year for the Manchester office space market, remain hopeful that the city will attract steady occupier demand in 2012.