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JLL London Office Market Seminar

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Presentation from JLL's 2018 London Office Market Seminar.

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JLL London Office Market Seminar

  1. 1. Driving performance in uncertain times London Office Markets Seminar
  2. 2. Any sign of a building boom? Central London historic development completions 35 8.6 9.2 6.8 1990-92 2001-03 2007-09 2018-20 (under construction) Speculative Pre-let
  3. 3. Leasing market indicators Strong take-up Past 12 months: 11.3 million sq ft 10 year average: 9.9 million sq ft Absorption positive in 2017 Past 12 months: 1.1 million sq ft 10 year average: 2.4 million sq ft Vacancy remains low Currently: 5.0% 10 year average: 5.5%
  4. 4. Occupier Drivers Health & wellbeing Amenity Lease flexibility Co-working Technology Social impact
  5. 5. 2017 volumes are predicted to hit £18 billion… Central London office investment turnover, 2000 – Q3 2017 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 0 2 4 6 8 10 12 14 16 18 20 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Overseas share£ billion UK Overseas Overseas share (RHS)
  6. 6. Prime office yields – global cities 2000 – 2017 Due to differences in reporting metrics across the globe, data is not strictly comparable. Source: JLL, October 2017 Yield% 2% 3% 4% 5% 6% 7% 8% FRANKFURT WEST END CITY PARIS NEW YORK TOKYO
  7. 7. Total Central London investment by origin of capital 37.2% 17.3% 12.3% ME6.4% 5% 4.9% 16.9%
  8. 8. In conclusion… Leasing market Market fundamentals remain sound Extreme downside risk to BREXIT related jobs overstated New sources of demand in London Some forecasts too pessimistic Submarket and asset performance will continue to vary significantly Capital markets London yields highest of all global gateway cities HK Chinese money will remain short/mid term Prime yield will remain stable Secondary is overvalued Overall Market looks stable, widespread growth unlikely Location and asset choice selection is key to performance

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