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London Offices Market Analysis Q2 2014
1. londonofficesMarket
analysisq2:2014
citycore
docklands
contents
midtown
cityfringe
leasing
F
ormany,itwillseemlikeafitting
swansong.H2SO,boughtby
ColliersInternationallastmonth,
madeabigsplashinQ2,andinits
finalgesturemadethebiggest
re-entrytoLondon’sleasing
leaguetable.Havingfallenoutofthetablein
Q1,itmadeadramaticreturntoenterthe
top10inbothofourleaguetables(see
investment,oppositepage).Itcamebackto
theleasingfoldtriumphantlywithastringof
dealsacrosscentralLondon,includingthe
77,000sqftprelettoClarksonsat
CommodityQuay,E1.Itwillbeinterestingto
seehowCollierswillfareinourrankingsin
league tableslondon offices market analysis
top london leasing agents 2014
1 JLL 873,189 59
2 Savills 799,674 50
3 CBRE 758,342 67
4 DTZ 500,020 36
5 Cushman&Wakefield 483,803 29
6 KnightFrank 412,056 33
7
H2SO(nowtradingasColliers
International)
168,097 15
8 HattonRealEstate 119,731 25
9 InglebyTrice 115,196 10
10 GMRealEstate 114,500 9
11 Tuckerman 111,352 16
12 Strutt&Parker 100,225 23
13 BNPParibasRealEstate 91,236 14
14 Farebrother 77,479 14
15 DeloitteRealEstate 75,988 11
16 LambertSmithHampton 66,059 1
17 EdwardCharles&Partners 65,325 14
18 NewtonPerkins 58,163 14
19 GVA 54,897 10
20 Allsop 52,050 11
21 HanoverGreen 50,392 10
22 BDGSparkesPorter 49,731 12
23 FrostMeadowcroft 43,631 9
24 Levy 40,861 2
25 MonmouthDean 40,386 15
Rank Agent Disposals
(sqft)
Noof
deals
Rank Agent Disposals
(sq ft)
Noof
deals
1 KnightFrank 120,136 6
2 Cushman&Wakefield 74,740 4
3 Savills 33,272 1
4 DTZ 27,834 3
5 McCalmontWoods 16,140 1
Rank Agent Disposals
(sq ft)
Noof
deals
1 DTZ 162,018 11
2 JLL 158,860 9
3 CBRE 134,739 13
4 Savills 99,915 8
5 Cushman&Wakefield 93,226 4
Rank Agent Disposals
(sq ft)
Noof
deals
1 DTZ 87,170 4
2= Savills 62,469 2
2= Cushman&Wakefield 62,469 2
4 CBRE 48,356 5
5 EdwardSymmons 25,606 7
Rank Agent Disposals
(sq ft)
Noof
deals
1 CBRE 310,733 26
2 JLL 264,116 17
3 Tuckerman 101,566 14
4 KnightFrank 101,190 12
5 Cushman&Wakefield 95,092 11
agents by submarket 2014
docklands
midtown
southernfringe
westend
Rank Agent Disposals
(sq ft)
Noof
deals
1 Savills 411,932 22
2 JLL 399,495 29
3 DTZ 177,664 10
4 CBRE 168,349 12
5 Cushman&Wakefield 158,276 8
Rank Agent Disposals
(sq ft)
Noof
deals
1 HattonRealEstate 97,496 22
2 Savills 83,706 4
3 InglebyTrice 81,418 3
4 CBRE 80,436 8
5 H2SO(nowtradingasColliers Int’l) 80,007 2
citycore cityfringe
www.estatesgazette.com80 19July2014
onthemove
delVe deeper into the data with interactiVe maps
largestdeals,includingthe192,000sqftletto
MizuhoBankatNewLudgate,EC4(withJLL)
and(withCBRE)theadditional51,000sqftto
Salesforce.comattheformerHeronTower
(seealsop73‘6seconds’).
Ofthefivefirmsthatlostapositioninthe
tableinQ2,fourhadonlyjustmadean
appearanceinthepreviousquarter:Richard
Susskind,CrosslandOtterHunt,AntonPage
andMatthews&Goodman.Thelastofthose
wasyetanotheragencyinvolvedinM&As
duringthequarter:itacquiredCityspecialist
ChapmanBatesinMay.Willthepurchase
leadtoatableplacementinthesecondhalf
oftheyear?Watchthisspace.
Themostsurprisingnametodisappear
fromourtableinQ2was2013start-upand
WestEndspecialistBluebook,whichwas
placed17thlastquarter.Foundingpartner
ChrisWatkinsaysthetightWestEnd
marketismakingittrickierforallagentsto
convertviewingstolettings.Heissceptical
whethertheincreasedamountof
secondhandspacetakeninQ2isthestartofa
trend,butadds:“It’spossiblesomeofthese
dealsaretheresultoftechcompaniestaking
morespacethantheyneedandthen
sublettingit.Thenatureoftheirbusiness
meanstheyoftendon’tknowexactlyhow
muchspacethey’llactuallyneedwhenthey
signalease.”
Q2 inVestment league table
1 GMRealEstate 1,637 27%
2 Savills 766 13%
3 KnightFrank 702 12%
4 DTZ 676 11%
5 JLL 581 10%
6 H2SO(nowtradingasColliers
International)
429 7%
7 CBRE 327 5%
8 MichaelElliott 260 4%
9 BNPParibasRealEstate 201 3%
10 Allsop 172 3%
Rank Agent Value
(£m)
Market
share
League table rankings take account of both sales and purchases
and the agent is credited for advising either party. Market share
is calculated from a total pool that is significantly larger than the
investment spend figure.DocklANDs citycoRe westeND MiDtowN
southeRN
fRiNge cityfRiNge
downloadthefullQ2marketanalysiswww.estatesgazette.com/loma
location of sales by Value 2014
27% 24% 21% 16% 6% 6%
81www.estatesgazette.com19July2014
the week practice & law eg lifethe market
M&A has had a dramatic effect on this quarter’s league
table, including a last hurrah for H2SO. Mark Simmons
summaries the ups and downs of Q2
ThingsareequallytightintheCity,says
MalcolmTrice,partneratInglebyTrice,the
firmthatmovedthefurthestuptheEG
leaguetablethisquarter,zoomingup12
placesintothetop10,thankslargelytothe
jointagencyinstruction(withH2SOand
Savills)onthedealtoshippingcompany
Clarksonswhichwassignedlastmonth.
Triceobserves:“Themarketisextremely
competitiveforsmallunits.Atthesame
time,well-advisedlargertenantsareseeing
thatlesschoiceisavailableandacting
accordingly.Theareathatistoughisthe
middleground–unitsinthe10,000-25,000
sqftbracket.”
AnothercentralLondonsubmarketfacing
supplyissuesistheSouthernFringe,
accordingtoJulesHind,partnerat
Farebrother,whosefirmdippedslightlyinthe
Q2rankingsto14thplace.Evengood-quality
secondhandspaceisatapremium.“So
[RBS’sdecisiontosublet]Bankside2&3,
SE1wasablessedreliefasitbroughtmore
supplytothemarket,butthenitwastaken,”
hesays.All370,000sqftisunderofferto
globaladvertisingagencyOmnicom.
“Thatjustkeepshappening,”saysHind.
“Assoonasabigchunkofspaceapproaches
themarket,itgoes.Sosupplyisonlyfora
verysmallperiodoftimeandthenitcomes
straightoffagain.”
inVestment
Comparedtothemovingandshakingtaking
placeontheleasingtablesinQ2,the
investmenttable,bycontrast,showedfewer
changes,althoughH2SO,previouslyoffthe
table,pusheditswaybackintothetop10,
thankslargelytoScottishWidows
InvestmentPartnership’ssaleof22
GrosvenorSquare,W1,toIndiabullsReal
Estatefor£155m.BNPParibasRealEstate
alsore-enteredthetableonthebackofthe
saleofNewBondStreetHouse,W1,toMeyer
Bergmannfor£110m.
Twofirmsleftthetop10thisquarter:
Cushman&WakefieldandDeloitteReal
Estate.JulianStocks,partneratDRE,says
thatalthoughsupplyremainstight,he
expectstoseeplentyofactivityoverthe
comingmonths:“Weareonlymid-cycle,so
notatallnearthetopofthemarketandwhat
we’reseeingatthemomentisthatrental
growthisstillpatchy.”
Afteraquietstarttotheyear,totalspend
shotupinQ2to£3.7bn(morethandoubling
the£1.5bnspentinthefirstquarter).The
largestsingledealwas CanaryWharfGroup
parentSongbirdEstateswhichsold10Upper
BankStreet,E14,inDocklandstoa
consortiumincludingChinaLifeInsurance,
QatarHoldingsandCWG.Itwentfor£795m,
givinganinitialyieldof5.5%.Investment
agentssuggestthatafewmorelargedeals–
includingthe£1bnsaleofCanadaSquare–
areonthewayforthesecondhalfof2014.
Q3,asthefirmdidnotmakeitontothetable
inthefirsthalfof2014.Theotherproperty
consultancythatchangedhandsinJune
(fromUGLtoTGPConsortium)wasDTZ,a
non-moverduringQ2,retainingfourth
place.
Therewasplentyofmovementintherest
ofEG’sleasingleaguetablethisquarter.
Savillsbrokeintothetopthree,still
dominatedbyJLLandCBRE,movingup
fromeighthpositionlastquarter.Thefirm
wasjointagentonseveralofthequarter’s
Midway through the year the take-up
figures are looking healthy enough but
perhaps not as high as might have been
hoped. Nonetheless, availability rates
are still falling and rents rising. London
is in need of more offices before
competition for space intensifies in the
next 6-12 months.
CLick on the area name to view its market breakdown
CLick on the tabs below for more in-dePth analysis
u Overview
Speculativenew-build
officeconstructiongot
underwaythisquarter.Is
thisthestartofa
sustainedsupplydriveto
meetcentralLondon
demand?
u leaguetables
Bignamesswapplaces
atthetopofthetables
whilstColliers
International’s
acquisitionofH2SO
looksallthemore
shrewd.
u submarkets
TheCityCoremayhave
hadthehighesttake-up
butitwastheWestEnd
thatwastherealstar
performerthisquarter
asitnearenough
matchedtheSquare
Mile.
southbank
westend
CLick for
detailed
boundary
map
2. Londonofficesmarket
analysisQ2:2014
ThecranesarebackSpeculative new-build office construction got under way this quarter. Is this the start
of a sustained supply drive to meet central London demand? Mark Simmons reports
I
t was fitting that in the quarter when
Danish toy brand Lego signed for new
offices in central London, (25,000 sq
ft of refurbished space at Kirbi Real
Estate Investment’s New Fetter
Place, EC4) there were positive signs
that London is building again, and some
of it is speculative.
Theyeargotofftoadisappointingstart,
withnomajornew-buildsbeginningonsite
inthefirstthreemonths.Theappearanceof
hardhatsinQ2waswelcome.
Thetwolargestnew-buildstostart
comingoutofthegroundwereLand
Securities’276,000sqft1NewStreet
Square,EC4inMidtownandthe
CrownEstate’s135,000sqft
Quadrant,W1,intheWestEnd.Also
inMidtown,GreatPortland
Estatesstartedworkonits
EGBluffer’sGuide:
London
in6seconds
“Take-uprose–aspredicted–inQ2,
toover3msqft.Lessexpectedwasa
burstoflettingactivityintheWest
End,almostmatchingthatseeninthe
City,eachsubmarketnotchingupjust
shortof1msqft.Prospectsforthe
secondhalfof2014arerosy,withover
3.8msqftunderoffer.Although
constructionstartsincreasedinQ2–
to1msqft–asignificantgapwith
take-upremains.Asaresult,total
availabilityacrossthecapital
remainedvirtuallyunchangedat
around35msqft.”
138,000sqft12-14NewFetterLane,
preletinitsentiretytolawyerBird&Bird
lastyear,althoughthatwilldonothingto
easethesupplysqueeze.Therewereno
majorconstructionstartsatallinQ2inthe
Citycore.
Thedecisiontopressthebuttononafew
schemesinQ2wasmetwithamuted
responsefromLondon’sagencyfraternity,
whosegeneralfeelingcanbesummedup
as“oneconstructionstartdoesnota
summermake”.Thatreflectsasolidbut
relativelyunexcitingsecondquarter.Take-
upofover3msqftwasup10%onthe
previousquarterand5%ontheequivalent
quarterlastyear.BoththeCityandtheWest
Endnotchedupdealsjustshortof1msqft.
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LondonOffices
produced by
Sourcecommercialspacefrom8,000liveinstructionsclickheretofindoutmore
5. A
verage rents in all bar one of
the London submarkets
crept upwards in Q2, with the
relatively small market of
Paddington being the only
one to report a small slip.
That has led to rental returns on our
hypothetical lease dropping, the only
market in central London this has
happened to. Two very contrasting
markets saw the highest year-on-year
growth, with Canary Wharf (18%) coming
top, albeit with a heavy rent free of 30
months, and Soho not far behind
(12%).
Andalthoughanecdotal
evidencesuggestsrent-free
periodsarefalling,ourfigures
showthat,overall,incentives
remainedstaticbetweenthefirst
andsecondquarters.
Foraninvestoreyeingwhich
markettostashtheircash,two
stoodheadandshouldersabovethe
rest:EustonRoadandMoreLondon,
whichbothsawrentalreturnsincreaseby
over5%quarteronquarter.
Howmuchrentsriseoverthenextsix
monthswillpartlydependonhow
occupiersrespondtothediminishing
supplyofnewlydevelopedspace,and
howmuchtheyarepreparedtopay
forprelets.Severaloff-radar
requirementsappearedduringQ2
andJLL’sheadofCityagency,Dan
Burn,comments:“Therearea
numberoflargerequirementsthatare
Wheretoput
rentsLondon offices market analysis
yourmoneyAll but one of London’s
markets ended Q2 in the
black, with Paddington
slipping, says Mark
Simmons
L
soho
£13.2mCHANGEONQ11.2%
rent £76.67psf
paddington
£9.6Mchangeonq1-0.2%
RENT£57.50PSF
victoria
£11.9mchangeonq12.9%
rent £71.25psf
eustonroad
£9.7MCHANGEONQ15.2%
rent£57.50psf
coventgarden
£11.7MCHANGEONQ11.9%
RENT £67.57PSF
mayfair/stjames
£19.3mchangeonq11.5%
RENT£110.42PSF
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7. occupiers
Goingofftherail
in depthLondon offices market analysis
More firms are considering good secondhand space if they can’t find new offices at
the right location or price. But there may not be much around, writes Mark Simmons
B
uyitoffthepegorinsistitis
nothingbutcouture,bespoke,
tailoredandguaranteedtofit.
Whenitcomestooffices,it
seemsmoreandmoreLondon
occupiersarewillingtotake
spacestraightofftherail,shunningshiny
new–andgenerallymoreexpensive–
spaceformoremodestsecondhand
accommodation.
Thatprospectisunderstandablygiving
lettingagentssweatypalms.Inthesecond
quarter,thatnightmarestartedtocome
true,withnearlytwo-thirdsoftenants
decidingtosignonthedottedlinefor
secondhandspace.
Thisisprobablythereasonwhyseveral
agentshavebeenkeentoexplainaway
second-quartertake-upasananomaly.
“Idon’tthinkanyoccupiergoesout
lookingforsecondhandspaceattheoutset
–theyjustgoouttoticktheirboxes,”says
JackTomlin,tenantrepresentationpartner
atKnightFrank.Formostfirmsthattook
spaceincentralLondoninQ2,previously-
occupiedofficesobviouslytickedtheright
boxesastheyaccountedfor62%ofspace
taken–nearly2msqft.Twoofthelargest
deals,including62,000sqfttofinance
companyOctopusatHolbornPlace,EC1,in
Midtown,wereinsecondhandbuildings.
Butthefiguressuggestitmaybemore
thanjustablipinthedata.Morethan1.6m
sqftofsecondhandspacewentunderoffer
duringQ2,including370,000sqftat
Bankside2&3,SE1,inthesouthernfringe,
whereglobaladagencyOmnicomisto
subletspacefromRBS.Thisdeal,aswellas
sublettingsofabout150,000sqftofJP
MorganspaceatAlbanGate,EC2,intheCity
toLloydsBankingGroupandEGowner
ReedElsevier,islikelytocompleteoverthe
summer,suggestingthatsecondhandtake-
Supportvaluationswiththelatestcomparablesclickheretofindoutmore
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8. TAKE-UP BY OCCUPIERS
central & local
government
others
retail & leisure
Services
Industry & Manufacturing
health & Education
TMT
utilities
transport
Property
insurance Professional
Financial
Associations
upwillbeashighinQ3,ifnothigher,thanit
wasinQ2.
Thereasonsforturningtosecondhand
spacearemanyandvaried.Publicandclient
imageisanimportantfactor,saysTomlin.
“Businessesarestillmindfulofnotbeing
tooflash,”hesays.“Thereisabalancetobe
hadbetweentakingmorespaceandnot
beingseentobetoobling.”Anotheristhe
highcapitalexpenditureassociatedwith
brandnewoffices,headds.“Smallerfirms,
inparticular,havebeenscarredbyfit-out
costsinthepast,soarenowmorecautious.”
Althoughpricingisimportant,itisn’tjust
aboutatop-linerentalfigure,saysMark
Lethbridge,partneratDeloitteRealEstate.
“Thetrendtowardssecondhandspaceisa
naturalfunctionoftwothings:areduced
supplyofbrand-newstockandtheneedof
occupierstoseevalueformoney,”hesays.
Whilepreletsonbrand-newspacecan
sometimesoffersuchvalue,BenCullen,
Londonoccupierrepresentationpartnerat
Cushman&Wakefield,saysthetrade-off
canbeanextendedperiodbeforemovingin.
“Onethingoccupierscan’thaveistoolittle
spacetorunandgrowtheirbusiness,”he
says.“Theyoftenwanttomovewithin14
months,socan’taffordtowaitthreeorfour
yearsforapreletbuilding.”
Thegoodnewsfornervousletting
agentsisthattheconsensusamong
propertyprofessionalsisthattheamount
of“grey”spaceincentralLondonappears
tobevirtuallydepleted.Hardtoidentify
untilitcomestothemarket,thissurplus-
to-requirementsaccommodationmay
neverhavebeenoccupied.Thelessgood
newsisthatthereisplentyofgood-quality
stockreadyforimmediateoccupation.
Ofthenearly10msqftofsecondhand
spaceavailableattheendofQ2,nearly
two-thirds–about6.4msqft–was
classifiedasgradeA.
Perhapsahappycompromiseforboth
landlordsandtenantswillbethecreationof
morerefurbishedspace,whichCullenfeels
islikely.“Ithinkwewillseemoredevelopers
shelvelong-termplansforredevelopment
andopttolauncharefurbishmentinstead
astheyknowtheycanturnabuildingaround
inaslittleassixmonths,”hesays.
n Financialisthe
biggestsectorat19%
oftake-up,edging
TMT(Q1’slargest
sector)intosecond
placewith18%
n Financial,TMTand
propertymakeup
nearlyhalfofall
take-upthisquarter
n Industryaccounted
for10%,boostedby
EstéeLauder’sprelet
of140,000sqftat
FitzroyPlace
NewLondonsubmarkets
TwothingshappenedinQ2thatcouldhave
far-reachingimplicationsforthefutureof
London’soccupationalmarket.Both
concernthecreationofnewLondonoffice
markets.ThefirstwasTransportfor
London’sdecisiontoditchdiscussionsona
potentialmoveto“grey”spaceinthe
establishedsubmarketofDocklandsin
favourofashinynewofficeinStratford.The
wayhadalreadybeentrailblazedinQ1
whennewsleakedoftheFinancialConduct
Authority’sintentiontoheadeasttoLend
LeaseandLondon&ContinentalRailway’s
InternationalQuarter.Thepointis,with
thosetwopreletstottingupto750,000sqft,
whetherthereisnowacriticalmassin
Stratfordthatwilldrawinothertenants
andleadtotheevolutionofcentral
London’sseventhofficesubmarket.
DanBayley,centralLondonmanaging
directoratBNPParibasRealEstate,which
isalettingagentatStratfordandKing’s
Cross,whereithasitselftakenaprelet,
saysmostoccupiersarecomfortable
broachingnewfrontiers.“Ingeneral,aside
fromsomefinancialoccupiers,mostare
willingtolookatnewareas,”hesays.
Anotherofthosenewareascameastep
closerinQ2whentheStModwenandVinci
jointventuresubmittedplansfor135,000
sqftofofficesatitsproposedNewCovent
GardenMarketschemeinNineElms.Until
now,thefocushasbeenonresidentialin
thisarea,buttheprospectofofficescoming
outofthegroundnextyearcouldreshape
occupationaldecisions.“Seeingis
believing,”saysKnightFrank’sJack
Tomlin.“Occupiersaremorecomfortable
whentheyseeinfrastructureisinplace.”
WhilethatisalreadytrueatStratford,the
NorthernLineextensiontoNineElmswill
takealittlelonger.
Timingisperhapsthecruxofthematter,
asnewbuildingsforgeneraloccupationin
StratfordandNineElmsareunlikelyto
arriveuntil2017attheearliest.Cushman&
Wakefield’sBenCullenobserves:“For
manyoccupiers,that’sstillalongwayoff,
whentheyarestrugglingtoseepast2016.”
Construction
Identifynewdevelopmentopportunitiesclickheretofindoutmore
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13. 0
sq ft put under
construction
in Q2
928,949
sq ft
let
12.16m
sq ft
available
£58.50
per sq ft
EGi consensus
rent
9.41%
availability
rate
5.26m
sq ft
Available and
ready to occupy
LeadenhallBuilding,MoorgateExchange,10FinsburySquare,The
BankingHalland67LombardStreet,completedthisquarter.Almost
1.2millionsq ftwasdeliveredbut,ofthat,470,000sq ftisprelet.
Theeffectofthesqueezeonnewstockisthatrentsarebeing
pushedupwards,withouraveragenew-buildaskingrentfigurenow
standingat£55.92persq ft,thehighestlevelrecordedsinceQ3
2008.Elsewhere,ourconsensusrentspanelplacesahypothetical
n 1.19millionsq ft
completedthis
quarter
n 61%ofthespace
thatcompletedisstill
available
n 0sq ftwentunder
constructionthis
quarter
n 4.05msq ftisdueto
completebeforethe
endof2015
Development Future development
investment saLESDevelopment Under construction
Address Price(£m) Size(sqft)
AlbanGate,LondonWall,EC2 £300 368,000
111OldbroadStreet,EC2 £111 107,000
1Poultry,EC2 £110 115,000
ProcessionHouse,55LudgateHill,EC4 £73 90,000
107LeadenhallStreet,EC3 £61 124,000
0
0.5
1
1.5
2
2.5
201620152014
Sq ft (millions)
0
5
10
15
20
201420132012201120102009
Sq ft (millions)
nprelet nspeculative nprelet nspeculative
n Supplyincreased
1.28millionsqft
quarter-on-quarter
n Premarketedspace
accountsfor34%ofall
CityCoresupply
Supply
Address Completiondate Sizespeculative(sq ft)
BloombergPlace,Bucklersbury,EC4 2015 380,000
AngelCourtTower,EC2 2015 365,000
LeadenhallBuilding,122LeadenhallStreet,EC3 2014 289,000
MoorgateExchange,72ForeStreet,EC2 2014 221,000
71QueenVictoriaStreet,EC4 2014 187,000
0
0.5
1
1.5
2
2.5
3
201420132012201120102009
Sq ft (millions)
nnew/refurbexisting npremarketing nsecondhand nunderconstruction
20,000sq ftgrade-Aunitona10-yearleaseintheGreshamStreet,
LeadenhallStreet,Broadgateareaat£58.50persqftwith22
monthsrent-free,whichisanincreaseof2.4%quarter-on-quarter.
Theinvestmentmarketwasactivethisquarter,withjustover
£1bnofdealscompleting.Thelargestofthosedealswas
Blackstone’s£300m(5.8%netinitialyield)purchaseofthelong
leaseholdofAlbanGate,125LondonWall,fromtheCarlyleGroup.
Headline figures
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14. in depthLondon offices market analysis
WhiletheCityCoremayhavehadarelatively
averagequarterintermsoftake-up,theWestEnd
outperformed.Take-upat919,000sq ftwasup74%uponthesame
periodlastyearandatthehighestlevelthismarkethasseensince
Q22010,whenamarginallyhigherfigureof925,000sq ftwas
recorded.TheheadlineintheWestEndthisquarterwasthe
140,000 sq ftprelettingof1FitzroyPlacebyEsteeLauder.Thedeal
representsoneofthebiggestpreletseverseeninthissectorand
providesawelcomefilliptoamarketwhosefive-yearquarterly
averagetake-upfigureis678,000sq ft.TheWestEndmarkettends
nottobetypifiedbypreletting,butthisquarteritaccountedfor26%
oftake-upwithothersignificantpreletsincludingKPMGsigningfor
37,000sq ftat20GrosvenorStreet.
Theconsequenceofthehighleveloflettingandprelettingis
westendq2:2014
Overview
n Take-upincreased
74%year-on-year
n Theaveragedeal
sizewas9,378sq ft
thisquarter,upfrom
6,541sq ftlastquarter
n TMTdroppedfrom
17%ofthetotalto8%
n Thefinancialsector
accountedfor19%of
take-up,adecrease
from23%lastquarter
Take-up
Key deals
Take-up by sector
Availability
Asking rent
Address Tenant Size(sq ft)
1FitzroyPlace,MortimerStreet,W1 EsteeLauderCompanies 140,443
5LanghamPlace,W1 TheOfficeGroup 66,059
10NewBurlingtonStreet,W1 TudorCapital 38,276
20GrosvenorStreet,W1 KPMG 36,909
48WarwickStreet,W1 AvantaBusinessCentres 34,487
0
0.5
1
1.5
2
2.5
3
3.5
H1 201420132012201120102009
Sq ft (millions)
nnew-build nsecondhand
0
2
4
6
8
10
12
14 Q214 Q113 Q413 Q313 Q213 Q112 Q412 Q312 Q212 Q111 Q411 Q311 Q211 Q110 Q410 Q310 Q2
%
nnew-build(existing) nsecondhand
noticedintheavailabilityrate,whichhasdroppedto4.76%–the
lowestlevelsinceQ12008.Ofthe4.8millionsq ftthatisbeing
marketedintheWestEnd,only34%isnewbuildorrefurbished
space–andofthat,890,000sq ftisyettogounderconstruction.The
figureof34%isthelowestofallofthesixmarketsthatthisreport
looksatandissignificantlylowerthanthesecond-lowestfigure,
whichis50%,recordedinDocklands.
Thetotalnewspacetobedeliveredintothismarketbetweennow
andtheendof2016is2.5millionsq ftand,encouragingly,86%of
thatspaceisstillavailable.Ofthespacetobedelivered,thereisa
focusonVictoria,withLandSecuritiessettodeliver480,000sq ftat
Novain2016andafurther190,000sq ftattheZigZagBuildingin
early2015.Completionsthisquartertotalled130,000sq ftand
included94,000sq ftattherefurbished10NewBurlingtonStreet,
40
60
80
100
20142013201220112010
£ psf
Q2
Construction
Financial
Others
Property
Retail & Leisure
Services
Health & education
Central & local government
Professional
Utilities
TMT
Transport
West end
continued
à
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Industry & Manufacturing
Associations
15. £76.67
per sq ft
EGi Consensus
rent
919,111
sq ft
let
4.84m
sq ft
available
280,000
sq ft put under
construction in Q2
4.76%
availability
rate
2.68m
sq ft
Available and
ready to occupy
whereTudorCapitaltook38,000sq ftatarentrumouredtobein
excessof£100persq ft.ThefocusofdevelopmentonVictoriameans
thattherearestillshortagesofspaceacrossothersubmarketsin
theWestEnd,andasaresultsecond-handrentscontinuetheir
upwardtrajectoryassupplybecomesincreasinglylimited.The
averagesecond-handaskingrentinthismarketisnow£62.73per
sq ftandisapproachingthepeakof£64.90persqftseeninQ22008.
n 130,000sq ft
completedinQ2
n 44,580sq ftofthat
completedspaceis
stillavailable
n 2.5millionsq ftis
duetocompletebefore
theendof2016
n 87%ofthespace
underconstructionis
speculative
Development Future development
investment salesDevelopment Under construction
Address Price(£m) Size(sq ft)
22HanoverSquare,W1 £155 74,000
NewBondStreetHouse,1-5NewBondStreet,W1 £110 11,000
MaryleboneGardens,35MaryleboneHighStreet,W1 £75 42,000
130ShaftesburyAvenue,W1 £67 59,000
50Broadway,SW1 £60 50,000
0
0.3
0.6
0.9
1.2
1.5
201620152014
Sq ft (millions)
0
2
4
6
8
10
201420132012201120102009
Sq ft (millions)
nprelet nspeculative nprelet nspeculative
n Supplydropped
520,000sq ft
quarter-on-quarter
n Premarketedspace
accountsfor18%ofall
WestEndsupply
n Thereis1.92million
sq ftofsecondhand
availablespaceinthe
WestEnd
Supply
Address Completiondate Sizespeculative(sq ft)
Nova,TerminusPlace,SW1 2016 480,000
ZigZagBuilding,SW1 2015 190,000
16BabmaesStreet,SW1 2014 151,000
SceptreHouse,169-173RegentStreet,W1 2014 150,000
Quadrant2,RegentStreet 2015 134,000
0
0.5
1
1.5
2
201420132012201120102009
Sq ft (millions)
nnew/refurbexisting npremarketing nsecondhand nunderconstruction
MuchliketheCityCore,theWestEndattractedalotofinvestment
activity,withtransactionstotalling£723m.Thelargesttransaction
wasthe£155msaleof22HanoverSquare:initiallybidsof£130m
weresoughtfortheproperty,whichwaseventuallysoldbyScottish
WidowsInvestmentPartnershiptoIndiabullsRealEstate.JLL
currentlyoccupiesthebuildingbutisduetovacate,withresidential
conversionmooted.
Headline figures
citycore docklandsmidtown cityfringesouthbankwestendanalysiscontents
CLickonthe area name to go direct to market breakdown
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16. in depthLondon offices market analysis
Midtowntake-upincreased29%onQ1,registering
620,000sq ft.TMTwasthelargestdriveroftake-up,
accountingfor35%,withlettingstopublisherEuromoneyInstitutional
Investor(twoonBouverieStreettotalling63,000sq ft),fellowpublisher
GuardianMediaGroup,whichtook28,000sq ftatMidlandGoodsShed,
andWarnerBrothers,whichtook20,000sq ftat200Gray’sInnRoad.
MidtowncamesecondonlytotheCityCoreintermsoflettingsin
new-buildorrefurbishedready-to-occupyspace,with173,000sq ft.
OnceagaintheEuromoneyInstitutionalInvestorlettingplayedapartin
this,withthedealat6-8BouverieStreetbeinginrefurbishedspace.
Elsewhere,GileadSciencestook28,000sq ftat280HighHolborn,while
Legotook25,000sq ftintherecentlyrefurbished8-10NewFetterLane.
Sincethebeginningof2013,withtheexceptionofQ3,Midtowntake-
upfigureshavebeenconsistentlyabovethefive-yearquarterly
midtownq2:2014
Overview
n Take-upwasup10%
onthesameperiod
lastyear
n 8%oftake-upwasin
under-construction
space,downfrom37%
lastquarter
n Theprofessional
sectorincreasedfrom
7%lastquarterto9%
thisquarter
n TheTMTsectorwas
themostprevalent,
accountingfor35%of
take-up,downfrom
54%lastquarter
n Centralandlocal
governmenthas
disappearedfromthe
take-upfiguresthis
quarter
Take-up
Key deals
Take-up by sector
Availability
Asking rent
Address Tenant Size(sqft)
33Holborn,EC1 OctopusInvestments 61,768
6-8BouverieStreet,EC4 EuromoneyInstitutionalInvestor 44,656
CarmeliteRiverside,50VictoriaEmbankment,EC4 GibsonDunn&Crutcher 39,084
King’sCrossCentral,MidlandGoodsShed,YorkWay,NW1 GuardianMediaGroup 28,000
280HighHolborn,WC1 GileadSciences 27,891
0
0.5
1
1.5
2
2.5
3
H1 201420132012201120102009
Sq ft (millions)
nnew-build nsecondhand
4
6
8
10
12
14 Q214 Q113 Q413 Q313 Q213 Q112 Q412 Q312 Q212 Q111 Q411 Q311 Q211 Q110 Q410 Q310 Q2
%
nnew-build(existing) nsecondhand
average,sotheavailabilityratehasfallenfrom7.19%atthebeginning
of2013to5.16%attheendofthisquarter.Ofthestockavailable,thereis
only287,000sq ftofneworrefurbishedready-to-occupyspace.The
mostsignificantconstructionstartofthequarterwasat1NewStreet
Square,where276,000sq ftwillbedeliveredbymid2016.
ThelargestinvestmentdealofthequarterwasTishmanSpeyer’s
purchaseof33Holbornfor£311m,representinganinitialyieldof4.8%.
30
40
50
60
20142013201220112010
£ psf
Q2
Associations
Construction
Financial
Others
Property Retail & leisure
Health & Education
Professional
TMT
citycore docklandsmidtown cityfringesouthbankwestendanalysiscontents
CLickonthe area name to go direct to market breakdown
£59.57
per sq ft EGi
Consensus rent
1.5m
sq ft available and
ready to occupy
498,000
sq ft put under
construction in Q2
Headline figures
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Services
17. in depthLondon offices market analysis
Asisoftenthecaseforthismarket,take-uphas
droppedbackfollowingstrongfigureslastquarter.
Take-upof159,000sqftwasrecordedinQ2,withthelargestdeala
61,000sq ftlettingtoGDFSuezEnergyat25CanadaSquare.
DocklandsgrabbedtheheadlinesforthewrongreasonsinQ2,
withtake-upfigureshitbythedecisionsoftheFinancialConduct
AuthorityandTransportforLondon,whobothchosetooverlook
Docklandsandtakeacombinedtotalof675,000sqftinStratford.
ThisrepresentsasignificantthreattoDocklands,whichtradeson
theideathatitistheonlyCentralLondonmarketthatoffersrents
atadiscount.ShouldoccupiersdetermineStratfordasaviable
alternative,thenDocklandsmighthaveabattleonitshands.
TherewereonlytwoinvestmentdealsinDocklandsthisquarter
buttheystandasareminderthatinvestorsstillseevalueinthe
docklandsq2:2014
Overview
n Take-upincreased
76%ontheQ12013
figure
n Buttake-upwas
down65%onlast
quarter
n Centralandlocal
government,which
didnotfeaturelast
quarter,accountedfor
21%oftake-up
n Theprofessional
sector,which
accountedfor46%
last quarter,only
accountedfor8%of
take-upthisquarter
n Docklands
mainstay,finance,
did notfeaturethis
quarter
Take-up
Key deals
Take-up by sector
Availability
Asking rent
Address Tenant Size(sqft)
25CanadaSquare,E14 GDFSuezEnergy 61,026
11WestferryCircus,E14 MinistryofJustice 33,272
1CanadaSquare,E14 HighSpeedTwo 16,140
40BankStreet,E14 BegbiesTraynor 12,124
1WestferryCircus,E14 LycatelHealth 8,322
0
0.5
1
11.5
22
2.5
H1 2014420132012201120102009
Sq ft (millions)
nnew-build nsecondhand
4
6
8
10
12
14 Q214 Q113 Q413 Q313 Q213 Q112 Q412 Q312 Q212 Q111 Q411 Q311 Q211 Q110 Q410 Q310 Q2
%
nnew-build(existing) nsecondhand
market. AconsortiumcomprisingChinaLifeInsuranceCompany,
QatarHoldingsandCanaryWharfGrouppurchased10Upper
BankStreetfor£795m,whileMorganStanleycompletedthe
sale-and-leasebackof25CabotSquarefor£225m.
Constructionstartsweremuted.However,sitepreparationsare
underwayat10BankStreet,whereadamhastobebuiltbefore
constructiononthe1.1msq ftofficedevelopmentcanbegin.
20
30
40
50
20142013201220112010
£ psf
Q2
Industry & manufacturing
tmtProfessional
Transport
citycore docklandsmidtown cityfringesouthbankwestendanalysiscontents
CLickonthe area name to go direct to market breakdown
1.69m
sq ft available and
ready to occupy
£38.08
per sq ft
EGi Consensus rent
8.82%
availability
rate
Headline figures
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Utilities
others
Health & education
Central & Local
government
18. In depthLondon offices market analysis
TheCityFringecontinueditsconsistentrunof
lettings,registering329,000sq ftletinQ2.Asis
oftenthecaseinthismarket,TMTdrovetake-up,accountingfor
35%ofthetotal.However,thisquarteritwasjoinedbytransport,
whichaccountedfor20%.Thetransportelementcameasaresultof
Clarksons’decisiontotake77,000sq ftofspaceatMaxProperty’s
CommodityQuay,whichisbeingrefurbished.
Thismarketoftenstrugglesfornew-buildorrefurbishedspace
buttheavailabilityfiguresreceivedaboostthisquarterasHelical
Bar’sTheBowerisnowincluded.Thedevelopmentwillbring18,500
sq ftofnewspaceinadditionto288,000sq ftofrefurbishedspace.
TheWarehouseelementbeganconstructionthisquarterandat
122,000sq ftitrepresentsthelargestconstructionstartofQ2.The
availabilityratehasstayedfairlyconsistentat5.71%.
Cityfringeq2:2014
Overview
n At329,000sq ft,
take-upwas10,000
sq ftabovethefive-
yearquarterly
average
n Theaveragedeal
sizeintheCityFringe
was7,841sq ft
n TMTaccountedfor
30%,downfrom34%
lastquarter
n Transport,which
didnotfeaturelast
quarter,accountedfor
20%oftake-upthis
quarter
Take-up
Key deals
Take-up by sector
Availability
Asking rent
Address Tenant Size(sqft)
CommodityQuay,EastSmithfield,E1 Clarksons 77,436
TheLeverBuilding,85ClerkenwellRoad,EC1 BlinkboxEntertainment 30,637
66PrescotStreet,E1 BankofTokyo-Mitsubishi 25,705
Lloyd’sChambers,1PortsokenStreet,E1 BDWTrading 20,898
38NorthamptonRoad,EC1 Orangebox 16,244
0
0.3
0.6
0.9
1.2
1.5
H1 201420132012201120102009
Sq ft (millions)
nnew-build nsecondhand
4
6
8
10
12
14 Q214 Q113 Q413 Q313 Q213 Q112 Q412 Q312 Q212 Q111 Q411 Q311 Q211 Q110 Q410 Q310 Q2
%
nnew-build(existing) nsecondhand
Ourconsensusrentspanelagainpointstorisingrentsinthis
market.AttheAldgatepricepointusedforCityFringe,theaverage
rentcalculatedwiththeinputofthepanelforahypothetical20,000
sq ftgrade-Aunitona10-yearleasewas£43.20with23monthsrent
free,whichisanincreaseof1.2%onlastquarter.
Thelargestinvestmentdealofthequarterwasthesaleof
99 City Roadfor£102mtoLondon&Regional.
10
20
30
40
50
20142013201220112010
£ psf
Q2
citycore docklandsmidtown cityfringesouthbankwestendanalysiscontents
CLickonthe area name to go direct to market breakdown
5.71%
availability
rate
329,351
sq ft
let
190,000
sq ft put under
construction in q2
Headline figures
Construction
Others
Retail & leisure
Industry & Manufacturing
Health & Education
TMT
Property
Insurance
Professional
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Services
Transport
19. in depthLondon offices market analysis
Forthesecondconsecutivequarterthismarket
recorded22deals.However,take-updipped
slightly,from282,000sqftto269,000sqft.Despitethedip,the
year‑to-datetake-upfigureis85%abovethelevelthatwas
recorded forthefirsttwoquartersof2013.
Take-upontheSouthBankwaswellbalanced,withTMT
accountingfor20%,professionalaccountingfor19%andproperty
16%.Thelargestlettingofthequarterwasthe55,000sq ftlettingto
HowardKennedyatOneLondonBridge.
Thelargestcompletionofthequarterwas240BlackfriarsRoad,
wherethereis71,516sqftavailable.Worryingly,therewereno
constructionstartsintheSouthernfringethisquarterandthe
pipelineislimitedwithSouthBankTower–whichshouldbe
completedlatein2015–theonlysizablespacetobedelivered
Southbankq2:2014
Overview
n Theprofessional
sector,whichdidnot
featurelastquarter,
accountedfor19%of
take-upthisquarter
n Thepropertysector
dropped30%last
quarterto16%this
quarter
Take-up
Key deals
Take-up by sector
Availability
Asking rent
Address Tenant Size(sqft)
1LondonBridge,SE1 HowardKennedy 54,552
240BlackfriarsRoad,SE1 Ramboll 31,204
BlueFinBuilding,SouthwarkStreet,SE1 Totaljobs 29,095
CottonsCentre,HaysLane,SE1 NetworkRail 22,804
240BlackfriarsRoad,SE1 InstantManagedOffices 17,388
0
0.3
0.6
0.9
1.2
1.5
H1 201420132012201120102009
Sq ft (millions)
nnew-build nsecondhand
4
6
8
10
12
14 Q214 Q113 Q413 Q313 Q213 Q112 Q412 Q312 Q212 Q111 Q411 Q311 Q211 Q110 Q410 Q310 Q2
%
nnew-build(existing) nsecondhand
beforetheendof2016.Theonlyconsolationisthatallofthespaceto
bedeliveredbeforetheendof2016isstillavailable.
TheSouthBankToweropportunitywasnotmissedbyHermes
RealEstateandCanadaPensionPlanInvestmentBoard,which
boughttheofficeandretailelementsfor£150m.Elsewhere,
20 BlackfriarsRoadwaspurchasedbyajointventurebetweena
subsidiaryofIGBandTowerRayfor£1whilepayingoff£65mofdebt.
10
20
30
40
50
60
70
80
20142013201220112010
£ psf
Q2
citycore docklandsmidtown cityfringesouthbankwestendanalysiscontents
CLickonthe area name to go direct to market breakdown
560,000
sq ft construction
completed in Q2
1.6m
sq ft available and
ready to occupy
£52.79
per sq ft EGi
Consensus rent
Headline figures
Associations
Construction
Services
Industry & manufacturing
Professional
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TMT
Others
Health & education
n Q2take-upis 57%
higherthanthesame
periodlastyear
nTheaveragedeal
sizeinQ2was12,161
sq ft
Financial
![londonofficesMarket
analysisq2:2014
citycore
docklands
contents
midtown
cityfringe
leasing
F
ormany,itwillseemlikeafitting
swansong.H2SO,boughtby
ColliersInternationallastmonth,
madeabigsplashinQ2,andinits
finalgesturemadethebiggest
re-entrytoLondon’sleasing
leaguetable.Havingfallenoutofthetablein
Q1,itmadeadramaticreturntoenterthe
top10inbothofourleaguetables(see
investment,oppositepage).Itcamebackto
theleasingfoldtriumphantlywithastringof
dealsacrosscentralLondon,includingthe
77,000sqftprelettoClarksonsat
CommodityQuay,E1.Itwillbeinterestingto
seehowCollierswillfareinourrankingsin
league tableslondon offices market analysis
top london leasing agents 2014
1 JLL 873,189 59
2 Savills 799,674 50
3 CBRE 758,342 67
4 DTZ 500,020 36
5 Cushman&Wakefield 483,803 29
6 KnightFrank 412,056 33
7
H2SO(nowtradingasColliers
International)
168,097 15
8 HattonRealEstate 119,731 25
9 InglebyTrice 115,196 10
10 GMRealEstate 114,500 9
11 Tuckerman 111,352 16
12 Strutt&Parker 100,225 23
13 BNPParibasRealEstate 91,236 14
14 Farebrother 77,479 14
15 DeloitteRealEstate 75,988 11
16 LambertSmithHampton 66,059 1
17 EdwardCharles&Partners 65,325 14
18 NewtonPerkins 58,163 14
19 GVA 54,897 10
20 Allsop 52,050 11
21 HanoverGreen 50,392 10
22 BDGSparkesPorter 49,731 12
23 FrostMeadowcroft 43,631 9
24 Levy 40,861 2
25 MonmouthDean 40,386 15
Rank Agent Disposals
(sqft)
Noof
deals
Rank Agent Disposals
(sq ft)
Noof
deals
1 KnightFrank 120,136 6
2 Cushman&Wakefield 74,740 4
3 Savills 33,272 1
4 DTZ 27,834 3
5 McCalmontWoods 16,140 1
Rank Agent Disposals
(sq ft)
Noof
deals
1 DTZ 162,018 11
2 JLL 158,860 9
3 CBRE 134,739 13
4 Savills 99,915 8
5 Cushman&Wakefield 93,226 4
Rank Agent Disposals
(sq ft)
Noof
deals
1 DTZ 87,170 4
2= Savills 62,469 2
2= Cushman&Wakefield 62,469 2
4 CBRE 48,356 5
5 EdwardSymmons 25,606 7
Rank Agent Disposals
(sq ft)
Noof
deals
1 CBRE 310,733 26
2 JLL 264,116 17
3 Tuckerman 101,566 14
4 KnightFrank 101,190 12
5 Cushman&Wakefield 95,092 11
agents by submarket 2014
docklands
midtown
southernfringe
westend
Rank Agent Disposals
(sq ft)
Noof
deals
1 Savills 411,932 22
2 JLL 399,495 29
3 DTZ 177,664 10
4 CBRE 168,349 12
5 Cushman&Wakefield 158,276 8
Rank Agent Disposals
(sq ft)
Noof
deals
1 HattonRealEstate 97,496 22
2 Savills 83,706 4
3 InglebyTrice 81,418 3
4 CBRE 80,436 8
5 H2SO(nowtradingasColliers Int’l) 80,007 2
citycore cityfringe
www.estatesgazette.com80 19July2014
onthemove
delVe deeper into the data with interactiVe maps
largestdeals,includingthe192,000sqftletto
MizuhoBankatNewLudgate,EC4(withJLL)
and(withCBRE)theadditional51,000sqftto
Salesforce.comattheformerHeronTower
(seealsop73‘6seconds’).
Ofthefivefirmsthatlostapositioninthe
tableinQ2,fourhadonlyjustmadean
appearanceinthepreviousquarter:Richard
Susskind,CrosslandOtterHunt,AntonPage
andMatthews&Goodman.Thelastofthose
wasyetanotheragencyinvolvedinM&As
duringthequarter:itacquiredCityspecialist
ChapmanBatesinMay.Willthepurchase
leadtoatableplacementinthesecondhalf
oftheyear?Watchthisspace.
Themostsurprisingnametodisappear
fromourtableinQ2was2013start-upand
WestEndspecialistBluebook,whichwas
placed17thlastquarter.Foundingpartner
ChrisWatkinsaysthetightWestEnd
marketismakingittrickierforallagentsto
convertviewingstolettings.Heissceptical
whethertheincreasedamountof
secondhandspacetakeninQ2isthestartofa
trend,butadds:“It’spossiblesomeofthese
dealsaretheresultoftechcompaniestaking
morespacethantheyneedandthen
sublettingit.Thenatureoftheirbusiness
meanstheyoftendon’tknowexactlyhow
muchspacethey’llactuallyneedwhenthey
signalease.”
Q2 inVestment league table
1 GMRealEstate 1,637 27%
2 Savills 766 13%
3 KnightFrank 702 12%
4 DTZ 676 11%
5 JLL 581 10%
6 H2SO(nowtradingasColliers
International)
429 7%
7 CBRE 327 5%
8 MichaelElliott 260 4%
9 BNPParibasRealEstate 201 3%
10 Allsop 172 3%
Rank Agent Value
(£m)
Market
share
League table rankings take account of both sales and purchases
and the agent is credited for advising either party. Market share
is calculated from a total pool that is significantly larger than the
investment spend figure.DocklANDs citycoRe westeND MiDtowN
southeRN
fRiNge cityfRiNge
downloadthefullQ2marketanalysiswww.estatesgazette.com/loma
location of sales by Value 2014
27% 24% 21% 16% 6% 6%
81www.estatesgazette.com19July2014
the week practice & law eg lifethe market
M&A has had a dramatic effect on this quarter’s league
table, including a last hurrah for H2SO. Mark Simmons
summaries the ups and downs of Q2
ThingsareequallytightintheCity,says
MalcolmTrice,partneratInglebyTrice,the
firmthatmovedthefurthestuptheEG
leaguetablethisquarter,zoomingup12
placesintothetop10,thankslargelytothe
jointagencyinstruction(withH2SOand
Savills)onthedealtoshippingcompany
Clarksonswhichwassignedlastmonth.
Triceobserves:“Themarketisextremely
competitiveforsmallunits.Atthesame
time,well-advisedlargertenantsareseeing
thatlesschoiceisavailableandacting
accordingly.Theareathatistoughisthe
middleground–unitsinthe10,000-25,000
sqftbracket.”
AnothercentralLondonsubmarketfacing
supplyissuesistheSouthernFringe,
accordingtoJulesHind,partnerat
Farebrother,whosefirmdippedslightlyinthe
Q2rankingsto14thplace.Evengood-quality
secondhandspaceisatapremium.“So
[RBS’sdecisiontosublet]Bankside2&3,
SE1wasablessedreliefasitbroughtmore
supplytothemarket,butthenitwastaken,”
hesays.All370,000sqftisunderofferto
globaladvertisingagencyOmnicom.
“Thatjustkeepshappening,”saysHind.
“Assoonasabigchunkofspaceapproaches
themarket,itgoes.Sosupplyisonlyfora
verysmallperiodoftimeandthenitcomes
straightoffagain.”
inVestment
Comparedtothemovingandshakingtaking
placeontheleasingtablesinQ2,the
investmenttable,bycontrast,showedfewer
changes,althoughH2SO,previouslyoffthe
table,pusheditswaybackintothetop10,
thankslargelytoScottishWidows
InvestmentPartnership’ssaleof22
GrosvenorSquare,W1,toIndiabullsReal
Estatefor£155m.BNPParibasRealEstate
alsore-enteredthetableonthebackofthe
saleofNewBondStreetHouse,W1,toMeyer
Bergmannfor£110m.
Twofirmsleftthetop10thisquarter:
Cushman&WakefieldandDeloitteReal
Estate.JulianStocks,partneratDRE,says
thatalthoughsupplyremainstight,he
expectstoseeplentyofactivityoverthe
comingmonths:“Weareonlymid-cycle,so
notatallnearthetopofthemarketandwhat
we’reseeingatthemomentisthatrental
growthisstillpatchy.”
Afteraquietstarttotheyear,totalspend
shotupinQ2to£3.7bn(morethandoubling
the£1.5bnspentinthefirstquarter).The
largestsingledealwas CanaryWharfGroup
parentSongbirdEstateswhichsold10Upper
BankStreet,E14,inDocklandstoa
consortiumincludingChinaLifeInsurance,
QatarHoldingsandCWG.Itwentfor£795m,
givinganinitialyieldof5.5%.Investment
agentssuggestthatafewmorelargedeals–
includingthe£1bnsaleofCanadaSquare–
areonthewayforthesecondhalfof2014.
Q3,asthefirmdidnotmakeitontothetable
inthefirsthalfof2014.Theotherproperty
consultancythatchangedhandsinJune
(fromUGLtoTGPConsortium)wasDTZ,a
non-moverduringQ2,retainingfourth
place.
Therewasplentyofmovementintherest
ofEG’sleasingleaguetablethisquarter.
Savillsbrokeintothetopthree,still
dominatedbyJLLandCBRE,movingup
fromeighthpositionlastquarter.Thefirm
wasjointagentonseveralofthequarter’s
Midway through the year the take-up
figures are looking healthy enough but
perhaps not as high as might have been
hoped. Nonetheless, availability rates
are still falling and rents rising. London
is in need of more offices before
competition for space intensifies in the
next 6-12 months.
CLick on the area name to view its market breakdown
CLick on the tabs below for more in-dePth analysis
u Overview
Speculativenew-build
officeconstructiongot
underwaythisquarter.Is
thisthestartofa
sustainedsupplydriveto
meetcentralLondon
demand?
u leaguetables
Bignamesswapplaces
atthetopofthetables
whilstColliers
International’s
acquisitionofH2SO
looksallthemore
shrewd.
u submarkets
TheCityCoremayhave
hadthehighesttake-up
butitwastheWestEnd
thatwastherealstar
performerthisquarter
asitnearenough
matchedtheSquare
Mile.
southbank
westend
CLick for
detailed
boundary
map](https://image.slidesharecdn.com/ffe59055-d5f0-4f28-8438-2f96fa2661eb-150727074007-lva1-app6892/85/London-Offices-Market-Analysis-Q2-2014-1-320.jpg)
