Market Analysis
Issue 4
This analysis details the top agents by number of disposals done and has been split out to reveal, where applicable, which office and therefore which market is more active.
CB Richard Ellis tops the table, and ends the year with a 19 deal lead over second placed DTZ. It is most active in the City, with a 95:81 split. Also more active in the City are Jones Lang LaSalle and Strutt & Parker. DTZ was most active in the West End, as were Knight Frank, King Sturge, GVA and Drivers Jonas. The highest placed single office agent is Richard Susskind, which finished sixth with 97 deals. Despite the current market conditions, the City still leads over the West End, in terms of numbers of deals completed which are attributable to a specific office – 649 to 524.
Agent share by number of disposals done – 2009
Rank Agent Name No. of Disposals City West End
1 CB Richard Ellis 176 95 81
2 DTZ 157 73 84
3 Knight Frank 110 53 57
4 Jones Lang LaSalle 104 55 49
5 Strutt & Parker 100 56 44
6 Richard Susskind & Co 97
7 King Sturge 92 41 51 8 GVA 84 41 43 9 Anton Page 81 10 E A Shaw 76 =11 Farebrother 75 =11 Drivers Jonas 75 32 43
13 Cushman & Wakefield 67 19 48
14 BNP Paribas Real Estate 56
15 Savills 55 27 28
16 Allsop 52 37 15
17 Colliers Godfrey Vaughan 46 =18 Ingleby Trice Kennard 37
=18 NB Real Estate 37 33 4
20 Edward Charles & Partners 36 21 Crossland Otter Hunt 35 22 Brogan Danvers Gold 34
23 Matthews & Goodman 33 24 9
24 Dron & Wright 31 25 6
25 Tuckerman 29 28 14 18 2 38 1m+ 750,000 to1m 500,000 to 750,000 250,000 to 500,000 Up to 250,000 28 31 17 6 18 On business/ not shopping Tourist Day trip nside M25 Working/ resident Sheep 46% 54%
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Top 5 agents by disposals done - office breakdown 2009
DTZ Jones Lang LeSalle Knight Frank
CB Richard Ellis Strutt & Parker
City West End
Rank 2008 Rank 2009 Agent Disposals (sq ft) No Deals Market Share
1 1 CB Richard Ellis 2,632,685 176 23%
4 2 Knight Frank 1,476,678 110 13%
3 3 DTZ 1,420,182 157 13%
2 4 Jones Lang LaSalle 1,168,517 104 10% 7 5 Strutt & Parker 957,659 100 9% 5 6 Cushman & Wakefield 888,208 67 8%
6 7 Savills 555,373 55 5%
12 8 Drivers Jonas 549,710 75 5%
9 9 King Sturge 486,168 93 4%
11 10 GVA 470,453 84 4%
13 11 Farebrother 461,944 75 4%
8 12 BNP Paribas Real Estate 431,743 56 4%
10 13 BH2 373,694 27 3%
15 14 Richard Susskind & Co 367,170 97 3%
21 15 Allsop 266,275 52 2%
16 16 E A Shaw 253,779 76 2%
17 17 Anton Page 221,980 81 2%
19 18 NB Real Estate 211,330 37 2%
14 19 Edward Charles & Partners 198,678 36 2% 20 20 Ingleby Trice Kennard 149,461 37 1% 18 21 Colliers Godfrey Vaughan 142,475 46 1% 23 22 Dron & Wright 118,115 31 1%
25 23 Pilcher Hershman 101,357 20 1%
na 24 Hutchinson Morrison Childs 101,072 10 1%
na 25 Kinney Green 95,242 16 1%
Central London agents market share league table – disposals 2009
CB Richard Ellis top by over one million sq ft
CB Richard Ellis retains top place for 2009 after letting over 2.6 million sq ft, taking a 23% market share. It acted on more disposals than any other agent, 176 in total, and now stands almost 1.2 million sq ft above the chasing pack. Its largest transaction was at Watermark Place, EC4, where Nomura took the entire 488,000 sq ft building through a transaction joint with second placed Knight Frank which climbs two places on 2008 after acting on 110 transactions and disposing of 1.48 million sq ft. Knight Frank cemented its second place finish following the disposal of 144,000 sq ft to Clyde & Co at St Botolphs, EC3. This was a joint transaction with CBRE and Cushman & Wakefield, which negotiated the terms of the deal.
CBRE also advised on the 180,000 sq ft disposal at Ropemaker, 90 Upper Thames Street, EC2, where the Bank of Tokyo-Mitsubishi UFJ has taken space spread over nine floors. The deal was through a joint transaction with Jones Lang LaSalle which has slipped by two places to fourth this year achieving a 10% market share. JLL also advised on the 63,000 sq ft taken by IG Index at Cannon Bridge House, 25 Dowgate Hill, EC4, and the disposal of Wells & More’s, 45 Mortimer Street, W1, where 62,000 sq ft was let to New Look.
DTZ again takes third place after disposing of over 1.4 million sq ft spread over 157 lettings. Its largest disposal saw News International take 186,000 sq ft at 3 Thomas More Square, E1, in a transaction with 13th placed BH2 which has slipped out of the top ten. Elsewhere DTZ let 70,000 sq ft at Bow Bells House, EC4, to Aberdeen Asset Management through a deal with sixth placed
Drivers Jonas and GVA climb into top ten
Fifth place has gone to Strutt & Parker this year after climbing two positions on 2008, acting on 100 transactions and letting 960,000 sq ft. Its largest letting was the disposal of 123,000 sq ft to Catlin Underwriting Agencies at 20 Gracechurch Street, EC3, through a joint agency disposal with CBRE and Savills.
Sixth placed Cushman & Wakefield completed 67 deals this year and other than the two lettings already mentioned it acted on the letting of 116,000 sq ft to the Bank of China at 1 Lothbury, EC2, which enabled Drivers Jonas to climb four places to eighth position. This was its largest letting of the 75 completed this year and helped it to achieve a 5% share of the market.
Savills finished seventh this time round after completing on 55 lettings totalling 555,000 sq ft. One of its largest lettings has seen AstraZeneca UK take over 49,000 sq ft on two floors at 2 Kingdom Street, W2, through a transaction with table toppers CBRE. Elsewhere, Robert Fleming Insurance Brokers has taken just shy of 40,000 sq ft on part of the third and fourth floor at 20 Gracechurch Street, EC3, in a transaction joint with CBRE and Strutt & Parker.
Ninth place this year went to King Sturge following 93 transactions giving it a 4% market share. Completing the table is GVA with 84 deals.Its largest disposal to take place was the 71,000 sq ft deal at 272 High Holborn, WC1, where the University of Arts London has taken the entire building through a letting with Farebrother.
Agents market share by market 2009
Rank Agent Disposals (sq ft) No deals Market share1 CB Richard Ellis 1,608,207 63 42% 2 Knight Frank 823,375 29 21% 3 Strutt & Parker 626,609 50 16% 4 Jones Lang LaSalle 566,865 45 15%
5 DTZ 445,553 46 12%
Rank Agent Disposals (sq ft) No deals Market share
1 CB Richard Ellis 571,892 82 19%
2 DTZ 398,756 72 13%
3 Jones Lang LaSalle 347,599 38 11% 4 Cushman & Wakefield 240,345 41 8% 5 Knight Frank 200,896 42 7%
Rank Agent Disposals (sq ft) No deals Market share
1 Farebrother 422,144 60 29% 2 CB Richard Ellis 226,563 15 16% 3 E A Shaw 170,599 50 12% 4 GVA Grimley 144,860 9 10% 5 Jones Lang LaSalle 131,838 12 9%
Rank Agent Disposals (sq ft) No deals Market share
1 Richard Susskind & Co 325,725 84 23%
2 DTZ 278,552 5 20%
3 BH2 275,169 6 19%
4 Anton Page 158,827 59 11% 5 BNP Paribas Real Estate 142,466 11 10%
Rank Agent Disposals (sq ft) No deals Market share
1 Knight Frank 210,795 8 51% 2 Cushman & Wakefield 166,087 3 40% 3 CB Richard Ellis 133,378 6 32% 4 Jones Lang LaSalle 86,868 4 21%
5 DTZ 34,852 2 8%
Rank Agent Disposals (sq ft) No deals Market share
1 DTZ 63,029 5 21%
2 E A Shaw 48,618 14 16%
3 Knight Frank 37,834 2 12%
4 Kalmars 29,163 6 10%
5 BNP Paribas Real Estate 14,528 1 5%
City core
West end
CB Richard Ellis climbed three places to top the City core table this year. In addition to its deals at Watermark Place, St Botolphs, and Ropemaker, it let 43,000 sq ft to Orrick Herrington & Sutcliffe at 107 Cheapside, EC2. Knight Frank took second place, achieving a 21% share of the market. This was largely due to the Nomura deal, but elsewhere it disposed of 144,000 sq ft at the Broadgate Tower, EC2, to serviced office provider Regus in a deal joint with Jones Lang LaSalle which slipped three places to fourth completing on 45 deals. Its joint agency transaction with Knight Frank to Itochu Europe at the Broadgate Tower, EC2, helped it achieve a 15% market share. Strutt & Parker took third with a 16% market share, and DTZ completes the table after letting 445,600 sq ft.
CBRE retained top spot in the West End after completing 82 transactions, claiming a 19% market share. The 63,000 sq ft letting to the Institute of Ismaili Studies, at 210 Euston Road, W1, at the start of the year helped secure its first place. DTZ took a 13% share of the market letting almost 400,000 sq ft. Its largest transaction was to New Look, which took 62,000 sq ft at Wells & More’s 45 Mortimer Street, W1, in a deal with third placed JLL which disposed of 350,000 sq ft. Cushman & Wakefield finished fourth after acting on 41 deals, its largest being the 28,000 sq ft letting to Heidrick & Struggles International Incorporated at Iona, 40 Argyll Street, W1, through a transaction with Strutt & Parker. Knight Frank took fifth place and a 7% share of the market.
Midtown
City fringe
Farebrother again took top spot in Midtown after completing an impressive 60 transactions totalling 422,000 sq ft. Its largest letting saw the University of the Arts London take 71,000 sq ft at 272 High Holborn, WC1, in a transaction joint with GVA Grimley which finished fourth this year. CBRE was second with 15 deals and a 16% market share. The lettings of 49,000 sq ft to Capgemini UK and 36,000 sq ft to GDF Suez Energy UK at 40 Holborn Viaduct, EC1, both joint with BNP PRE, helped secure its position. E A Shaw climbed two places to third with 50 deals, up by 20 on 2008. Its letting of 13,000 sq ft to Adidas UK at 6 Langley Street, WC2, with Cooper Collins was its largest transaction. JLL finished fifth letting 132,000 sq ft over 12 transactions, its most notable joint with CBRE to British American Tobacco at Arundel Great Court, WC2.
Once again Richard Susskind is top of the yearly table in the City fringe. It acted on an impressive 84 lettings and achieved a 23% market share. Of the 326,000 sq ft let, a 48,000 sq ft deal to Datamonitor at 119 – 141 Farringdon Road, EC1, was its largest and DTZ’s second largest transaction. Elsewhere, the 186,000 sq ft letting to News International at Trinity Tower, 3 Thomas More Square, E1, was DTZ’s largest transaction and helped it in taking second place. This letting also secured third place for BH2, and a 19% market share. Anton Page again finished fourth, with a creditable 59 lettings the largest coming at Arnold House, 36-41 Holywell Lane, EC2, where 19,000 sq ft has been taken by CCA International (UK) in a disposal joint with Allsop. BNP PRE took fifth this year with 11 transactions totalling 142,400 sq ft.
Docklands
Southbank
Knight Frank topped the Docklands table with eight deals earning it a 51% share of the market. Of the 211,000 sq ft disposed, the 89,000 sq ft letting to LOCOG at 25 Canada Square, was its largest. This transaction also helped Cushman & Wakefield climb two places to second. An undisclosed letting of 73,000 sq ft and a 4,000 sq ft letting to Multitrax at the same property also added to both agents overall figures. CBRE slipped to third with a 32% market share. An 82,000 sq ft letting to the FSA at One Canada Square was its most significant transaction which also helped JLL
With a 21% market share DTZ remained at the top of the Southbank table. It completed 63,000 sq ft worth of disposals with its largest transaction occurring at the Cottons Centre, Hay’s Lane, where 30,500 sq ft was let to Markit Group. E A Shaw acted on 14 deals climbing to second. A 16,000 sq ft letting to Guy’s and St Thomas’ NHS Foundation Trust at Mary Sheriden House, 11-19 St Thomas Street was its most notable transaction. This letting also contributed to Kalmars fourth place finish. The 23,000 sq ft letting to Teach First at 4 More London and the 15,000 sq ft letting at
Ropemaker, EC2
Central London agents market share league table – acquisitions 2009
Rank Agent Acquisitions (sq ft) No deals Market share
1 Drivers Jonas 859,011 18 17%
2 CB Richard Ellis 633,181 50 12%
3 Knight Frank 340,162 19 7%
4 DTZ 288,027 25 6%
5 Jones Lang LaSalle 234,804 22 5%
6 Devono Limited 233,012 60 5%
7 King Sturge 160,726 31 3%
8 Cushman & Wakefield 151,636 26 3%
9 Allsop 131,904 4 3%
10 BNP Paribas Real Estate 131,654 12 3%
11 GVA 129,742 18 3%
12 Savoy Stewart 117,523 11 2%
13 Montagu Evans 108,963 13 2%
14 Carter Jonas 88,490 14 2%
15 E A Shaw 83,664 14 2%
16 Lambert Smith Hampton 81,190 12 2%
17 Susan Earl Commercial 74,150 7 1%
18 Newton Perkins 61,041 2 1%
19 Crossland Otter Hunt 53,512 9 1%
20 Savills 52,815 10 1%
21 Farebrother 51,519 7 1%
22 Collins Commercial 48,666 2 1%
23 Chapman Bates 45,300 2 1%
24 Hexell Wylie 43,151 1 1%
25 Ingleby Trice Kennard 39,730 1 1%
Drivers Jonas overtakes DTZ to take top spot
Drivers Jonas climbed from fourth place to top the acquisitions table for 2009 after achieving a 17% market share. This was principally due to the fact that it represented Nomura in the largest deal to sign this year at Watermark Place, 90 Upper Thames Street, EC4, where 488,000 sq ft was taken. Other notable instructions in its 18 deals include University of the Arts London, for which it acquired 71,100 sq ft at 272 High Holborn, WC1, and IG Index which let 63,300 sq ft at Cannon Bridge House, 25 Dowgate Hill, EC4.
Climbing one place and taking a 12% share of the market is CB Richard Ellis which advised on 50 deals this year. Its largest deals securing this position include acting for the Bank of China in its 115,600 sq ft acquisition at One Lothbury, EC2, and on behalf of New Look in the 61,600 sq ft letting at Wells & More’s, 45 Mortimer Street, W1. Following behind is Knight Frank which climbed an impressive eight places this year acting on 340,200 sq ft to secure third place. Acting on the second largest acquisition of the year it advised the Bank of Tokyo-Mitsubishi UFJ in its 180,600 sq ft acquisition at Ropemaker, 25 Ropemaker Street, EC2. Elsewhere it secured 42,800 sq ft for Orrick Herrington & Sutcliffe at 107 Cheapside, EC2, helping it achieve a 7% share of the market.
DTZ slips to fourth while Devono climbs to sixth
DTZ slipped from the top spot to take fourth place this year with its largest deal acting for IHS UK to secure 33,900 sq ft at 133 Houndsditch, EC3. This, coupled with advising FBN Bank on
its 32,000 sq ft acquisition at 5 Aldermanbury Square, EC2, saw it take a 6% share of the market. Coming in fifth was Jones Lang LaSalle which slipped two places advising on 234,800 sq ft, with its most notable deal acting for Mastercard at 10 Upper Bank Street in Docklands where 32,300 sq ft was taken. Not far behind and moving up four places is Devono, which completed more than three times the number of deals of first placed Drivers Jonas. Its largest deals included advising Calder UK in acquiring 16,200 sq ft at Arundel Great Court, 2 Arundel Street, WC2 and securing the entire 15,300 sq ft The Terrace, 155-173 Tooley Street, SE1, for Red Bull, to achieve a 5% share of the market.
Retaining seventh place and acting on 160,700 sq ft worth of acquisitions is King Sturge, which successfully advised TLT Solicitors in its letting of 24,600 sq ft at 20 Gresham Street, EC2. Elsewhere it acted for TMP Worldwide in its 23,000 sq ft acquisition of the newly-built 265 Tottenham Court Road, W1. Climbing up one place to eighth spot is Cushman & Wakefield, which completed 26 transactions this year with its acquisition of 16,800 sq ft for Banco do Brasil and a 12,000 sq ft for IR Group at 8 Curtain Road, EC3, contributing to its 3% share of the market.
The final two places in the top ten also took a 3% share of the market and went to Allsop and BNP Paribas Real Estate. Despite only advising on four transactions and not making the table last year, Allsop successfully acted for Catlin Underwriting in its acquisition of 122,700 sq ft at 20 Gracechurch Street, EC3. BNP Paribas Real Estate completes the top ten after acting on eleven deals. It’s most notable was the 31,100 sq ft letting by EDF Energy at Derwent London’s Qube, 90 Whitfield Street, W1.
CB Richard Ellis took top spot in Q4 2009 with top five finishes in four out of the six markets and first place finishes in the City core, West End and Midtown. It disposed of over 500,000 sq ft more than any other agent with its largest transaction seeing 144,000 sq ft let to Clyde & Co at St Botolphs, EC3, through a deal with second placed Cushman & Wakefield and third placed Knight Frank which both took a 16% share of the market.
Cushman & Wakefield climbed four places on last quarter after finishing joint first in Docklands and achieving three top five place finishes. Its largest transaction was the disposal of 115,500 sq ft at 1 Lothbury, EC2, to the Bank of China. This deal also aided Drivers Jonas in completing 30 transactions and climbing five places to eighth position this quarter taking an 8% share of the market.
Knight Frank made the top five in four of the markets and topped the Southbank and Docklands table. Other than its letting to Clyde & Co its largest transaction was at 25 Canada Square, where LOCOG has taken 89,000 sq ft through a joint agency transaction with Cushman & Wakefield. Elsewhere it disposed of 32,000 sq ft to the UK Payments Administration at 2 Thomas More Square, E1, in a letting joint with BH2 and DTZ.
Jones Lang LaSalle climbed to fourth this quarter with 49 transactions and a 14% share of the market. Its largest letting was at Cannon Bridge House, 25 Dowgate Hill, EC4, where IG Index has taken 63,000 sq ft through a deal joint with CBRE. Elsewhere the letting of 56,000 sq ft to FSA at One Canada Square with CBRE enabled it in taking a fourth place finish in Docklands.
Strutt & Parker completes the top five this quarter. It acted on 44 deals totalling 493,000 sq ft. Its 13% market share was largely down to the 123,000 sq ft disposal to Catlin Underwriting Agencies at 20 Gracechurch Street, EC3 through a deal joint with CBRE and Savills.
St Botolphs, EC3: Clyde & Co takes 144,000 sq ft
Central London letting agents league table – Q4 2009
Rank Agent Disposals (sq ft) Total
1 CB Richard Ellis 1,137,631 76 2 Cushman & Wakefield 616,575 29 3 Knight Frank 596,754 46 4 Jones Lang LaSalle 538,619 49 5 Strutt & Parker 492,784 44
6 Savills 357,065 23
7 DTZ 332,214 48
8 Drivers Jonas 320,412 30 9 BNP Paribas Real Estate 217,337 24 10 King Sturge 170,698 25
11 GVA 159,291 21
12 Farebrother 131,022 11 13 Edward Charles & Partners 103,958 16 14 Richard Susskind & Co 94,101 20 15 NB Real Estate 72,151 11
16 Allsop 60,234 19
17 BH2 58,529 4
18 Teacher Marks 56,906 3 19 Dron & Wright 56,887 11
20 E A Shaw 53,900 21
City core
1 CB Richard Ellis 516,800 22 2 Strutt & Parker 320,615 20 3 Cushman & Wakefield 296,399 6 4 Jones Lang LaSalle 259,340 22 5 Drivers Jonas 249,699 14 West End
1 CB Richard Ellis 343,609 39
2 DTZ 133,600 28
3 Knight Frank 108,972 21 4 Cushman & Wakefield 108,260 16 5 Strutt & Parker 101,955 18 Midtown
1 CB Richard Ellis 169,907 9
2 Farebrother 119,306 8
3 BNP Paribas Real Estate 108,724 4
4 GVA Grimley 80,758 2
5 Jones Lang LaSalle 77,762 6 Docklands
=1 Knight Frank 166,087 3 =1 Cushman & Wakefield 166,087 3 3 CB Richard Ellis 101,027 5 4 Jones Lang LaSalle 86,868 4 5 Miles Commercial 14,159 1 City Fringe
1 Richard Susskind & Co 76,945 16 2 Knight Frank 67,090 6 3 BNP Paribas Real Estate 51,449 5 4 Strutt & Parker 47,816 3
5 DTZ 43,934 2
Southbank
1 Knight Frank 23,306 1
2 E A Shaw 13,234 5
3 Montagu Evans 8,301 1 4 Brogan Danvers Gold 5,010 2
5 DTZ 4,976 1
20 Gracechurch Street, EC3: 123,000 sq ft let to Catlin Underwriting Agencies
City Core City Fringe Docklands Midtown Southbank West End Overall 2008 2009 Q1,2,3,4 2009 Q4 2008 2009 Q1,2,3,4 2009 Q4 2008 2009 Q1,2,3,4 2009 Q4 2008 2009 Q1,2,3,4 2009 Q4 2008 2009 Q1,2,3,4 2009 Q4 2008 2009 Q1,2,3,4 2009 Q4 2008 2009 Q1,2,3,4 2009 Q4 Takeup (million sq ft) annual or quarter total
New/Refurb existing 0.16 1.65 0.46 0.33 0.12 0.05 0.01 0.00 0.00 0.20 0.20 0.13 0.04 0.04 0.03 0.47 0.47 0.25 1.20 2.50 0.92 Premarketing 0.01 0.00 0.00 0.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01 0.00 0.00 0.01 0.00 0.00 0.17 0.00 0.00 Secondhand 1.83 1.47 0.73 0.85 0.94 0.26 0.75 0.40 0.27 0.75 0.94 0.30 0.25 0.18 0.03 1.91 1.70 0.62 6.33 5.63 2.22 Under Construction 0.45 0.15 0.14 0.10 0.06 0.01 1.90 0.00 0.00 0.13 0.02 0.00 0.05 0.00 0.00 0.26 0.06 0.05 2.88 0.30 0.20 Total 2.46 3.27 1.34 1.41 1.13 0.33 2.66 0.40 0.27 1.07 1.17 0.43 0.34 0.23 0.05 2.65 2.23 0.93 10.59 8.42 3.34 Availability (million sq ft) annual quarterly average or quarter end
Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 New/Refurb existing 1.44 2.98 2.92 0.37 0.48 0.32 0.10 0.39 0.55 0.31 0.55 0.48 0.04 0.04 0.02 0.35 0.77 1.19 2.62 5.21 5.49 Premarketing 7.45 7.32 7.32 2.08 1.97 1.98 4.59 5.08 5.08 0.33 0.81 0.81 0.78 0.54 0.85 1.41 1.30 1.36 16.64 17.02 17.40 Secondhand 3.23 4.22 4.40 1.86 2.31 2.32 0.85 1.53 1.78 1.84 2.49 2.43 0.49 0.64 0.70 3.04 5.20 5.21 11.31 16.39 16.84 Under Construction 4.69 2.58 1.75 0.34 0.25 0.20 2.54 0.54 0.37 1.14 0.76 0.67 0.01 0.34 0.35 1.54 1.17 0.38 10.26 5.64 3.72 Total 16.82 17.10 16.39 4.66 5.01 4.82 8.08 7.53 7.78 3.63 4.61 4.39 1.32 1.56 1.93 6.34 8.44 8.14 40.84 44.25 43.45 Availability Rate % annual average or quarter
Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 % 8.40% 12.55% 12.54% 10.69% 13.26% 12.52% 4.79% 8.64% 10.40% 7.08% 9.70% 9.18% 5.09% 6.16% 6.64% 5.50% 9.49% 10.04% 6.92% 9.97% 10.22% Under Offer and Withdrawn (million sq ft) quarter or quarterly average
Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Under offer 0.68 0.45 0.56 0.15 0.11 0.17 0.09 0.12 0.37 0.17 0.15 0.08 0.04 0.01 0.03 0.24 0.24 0.19 1.38 1.08 1.39 Withdrawn 0.31 0.08 0.13 0.05 0.05 0.03 0.06 0.05 0.02 0.05 0.06 0.10 0.00 0.00 0.00 0.09 0.09 0.07 0.55 0.33 0.35 Average Asking prices (£psf) quarter or quarterly average
*New leases only Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 New Build Existing £59.92 £45.43 £42.29 £53.79 £39.11 £32.50 £37.72 £40.13 £40.33 £56.49 £47.85 £41.93 £46.54 £43.66 £42.50 £84.08 £71.44 £75.00 £56.42 £47.94 £45.76 Second-hand Grade A £42.18 £33.45 £32.39 £32.70 £26.85 £23.98 £31.03 £30.47 £29.25 £45.71 £36.42 £34.77 £37.72 £27.59 £24.42 £60.67 £49.98 £46.42 £41.67 £34.13 £31.87 Investment Sales (million sq ft) Annual or quarter total
Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Total sq ft 1.84 2.85 1.01 0.44 1.22 0.11 3.08 1.68 1.68 0.88 0.93 0.23 0.85 0.14 0.07 2.09 2.68 1.02 9.18 9.50 4.11
No Transactions 23 34 12 23 22 8 4 3 3 24 24 6 10 7 2 72 74 25 156 164 56
Construction Starts (million sq ft) Annual or quarter total
Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Total started 0.69 0.68 0.00 0.49 0.13 0.00 0.38 0.00 0.00 0.33 0.11 0.02 0.00 0.62 0.00 1.33 0.35 0.00 3.21 1.88 0.03 Pre-let 0.00 0.18 0.00 0.16 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.25 0.00 0.18 0.00 0.00 0.34 0.43 0.00 Speculative 0.69 0.50 0.00 0.32 0.13 0.00 0.38 0.00 0.00 0.33 0.11 0.02 0.00 0.37 0.00 1.15 0.35 0.00 2.87 1.45 0.03 Completed Space Still available (million sq ft) (completion by full year or part of year)
Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Q1,2,3,4 Q4 Total completed 3.77 2.44 0.00 0.38 0.19 0.05 0.66 0.75 0.73 0.55 0.53 0.00 0.24 0.00 0.00 2.14 2.11 0.98 7.74 6.03 1.76 Still available 1.93 1.31 0.00 0.10 0.12 0.04 0.32 0.21 0.21 0.05 0.41 0.00 0.00 0.00 0.00 0.17 1.02 0.69 2.56 3.08 0.93 Future Completions (million sq ft) for full year or part of year
Delivery date 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012 Total to complete 1.65 0.83 0.00 0.54 0.00 0.00 0.00 2.52 0.00 1.04 0.00 0.00 0.50 0.00 0.58 1.45 0.00 0.00 5.17 3.35 0.58 Amount still available 0.93 0.79 0.00 0.34 0.00 0.00 0.00 0.53 0.00 0.87 0.00 0.00 0.04 0.00 0.34 0.79 0.00 0.00 2.97 1.32 0.34 % still available 56% 96% 0% 63% 0% 0% 0% 21% 0% 84% 0% 0% 8% 0% 59% 55% 0% 0% 57% 39% 59%
Introduction
The property market is at the end of a momentous decade, in which investment and development boomed and then spectacularly bust. The IPD estimates that the total size of the UK economy grew by up to 60% in just seven years before collapsing by almost 20% in two years, a key indicator that the normal property cycle has been broken.
The past year has certainly continued to be a struggle and despite some positive movements the implications of the turbulent financial markets are here to stay for both the short term and medium term outlook. London’s economic status as a global financial centre has been rocked and despite the bank of England issuing a £1 trillion re-capitalisation of the banks the UK economy has continued to slip into recession. Although appearing to still hold dominance in the short term, it is the long term status London will hold as “the financial centre of the world” which is being questioned.
The severe lack of debt available and reluctance by banks to lend is still hampering the real estate investment market and deals have been few and far between. Despite this there has been some marked improvement in activity, which has picked up towards the back end of the year, as overseas investors continue to make use of the weak value of the sterling and fair priced capital and are eager to claim prime well let stock before opportunities run dry. This does offer some promise to the market reiterating that it remains to be perceived as an important global hub of economic activity.
The occupier market also started to respond towards the end of 2009 after two quarters of stagnation. There are now increasing signs of recovery with large requirements re-surfacing as good quality space remains limited and tenants with up and coming lease breaks search for new offices. Agents appear to be far busier than this time last year and the sheer volume of deals has risen dramatically.
Capital values move as rents play catch up
Capital values slid throughout 2009 as the national recession deepened and instability spread throughout the real estate market. This has started to stabilise for good quality well let properties as prime investment opportunities become limited and renewed demand drives pricing.
This renewed interest has even prompted the largest positive movement in capital values in 15 years, with values surging in November by 2.4% according to the IPD Index. This has resulted in some sale prices even exceeding asking values for prime well located stock, like the sale of 5 Churchill Place by Canary Wharf Group where the freehold was sold to a private overseas investor for £208 million, £38 million above the book value in June. The continued lull in the value of the Sterling has also meant that London-based capital is offering good value to overseas investors, opportunity funds and well positioned REIT’s which have long established access to debt. Those who are able to capitalise now are likely to reap the rewards as we head into the next upturn.
Concerns surrounding investment opportunities have shifted away from yield levels, which had been the main focus of the market decline, to the valuation impact caused by the decline in rental values, which inhibits average annual returns.
Rents across the capital still appear to be playing catch up,
especially for secondary stock which is in abundance in the current market. We are unlikely to see any positive push for this grade until 2011 with values sliding further in the early months of 2010, although tenants may turn to refurbishment if no suitable space is available.
Rental values for prime stock on the other hand are beginning to stabilise as demand returns and there is likely to be some positive movement for the most sought after floor plates while supply continues to be contained.
Occupier dynamics shift
There is no doubt that London has had to shift its focus on occupier behaviour, responding to changing occupier dynamics with different tenant groups propping up individual markets. Certain key occupier groups now have to focus on survival rather than expansion, a growing issue as unemployment hit 2 million earlier in the year. One area outside the finance industry to be largely affected by expansion cut backs is the public sector. Heavy caps on spending and increasing debt and job losses are likely to stem demand for the next few years and this is likely to impact the West End, a prime location for government agencies.
Deals, in general, are taking longer to complete and several transactions failed at the final hurdle earlier this year including Fortis Bank pulling out of taking space at 150 Cheapside, EC2 after its board failed to back the proposed move. Elsewhere, LaSalle Asset Management failed to secure space at 20 Gresham Street, EC2. That said, Canadian Bank CIBC is now expected to take 50,000 sq ft, TLT Solicitors is under offer on 22,000 sq ft and Majedie Investments is taking 12,000 sq ft at 150 Cheapside. At 20 Gresham Street CHP Consulting and TLT Solictors have exchanged on 35,000 sq ft. We have startedto see some large transactions returning, with the most notable seeing Nomura take the entire newly completed Watermark Place, EC4, which instigated a flurry of renewed interest in the City market.
Rent free periods hit a high of four years in 2009 and a shift to shorter term more flexible lease structures appears fundamental in the current market.
The West End has benefitted from its diverse occupier dynamics and cut priced rental values offering prime occupancy for those previously priced out of this market. This has resulted in a continued demand for sub 10,000 sq ft deals, helping prop up the market. The City’s heavy reliance on the finance industry has certainly seen a stem in demand in general throughout 2009 as one would expect, but limited development and completions have kept vacancy rates contained, protecting the market from an over supply of stock, a problematic characteristic of previous recessions.
We are likely to see a surge in the demand from the business services industry over the forthcoming years as the finance industry continues to be streamlined.
Development stifled as market suffers
The severe cut backs in lending by the banks over the past two years have drastically affected the volume of development in London. Projects have been put on hold and speculative development has ground to a halt. Proposed iconic buildings have continued to be sidelined quarter after quarter and they are likely
Overview
5 Churchill Place, E14: Sold to overseas investor for £208 million
150 Cheapside, EC2: CIBC, TLT Solicitors and Majedie Investments under offer to take space
Shard of Glass, SE1: Construction begins 20 Gresham Street, EC2: 35,000 sq ft let to TLT Solicitors and CHP Consulting
to remain on the back burner until both a recovery in the real estate market and wider economy is in full swing.
Developments such as British Land’s Cheesegrater site on Leadenhall Street, EC3, have even opted for interim uses for their sites by short-listing more than a dozen young architects for a temporary solution to fill the Richard Rogers’ site which appeared to come to a standstill last summer.
The severe lack of debt is likely to mean that construction starts will continue to be few and far between over the forthcoming year and this could pose huge problems for the market in 18-24 months time. Reduced planning and development now will inevitably mean a stem in the flow of the construction pipeline and subsequently occupiers will have to turn their attention to refurbishments, should they wish to take space in the capital.
On a more positive note, the long awaited Shard of Glass has finally gone under construction with steelworks now visible above ground level. This will not only provide an alternative large floor plate location for occupiers once completed in 2012, but also a symbolic icon for a London emerging from a period of hardship and recession.
We have also started to see a shift in occupational usage with mixed use policies being seen as a means of spreading risk while also regenerating non-core hubs within the capital.
Outlook for 2010
The London real estate market has certainly seen a shift in the way it operates over the past few years and despite slightly recovering demand starting to prompt a mild improvement in market sentiment we are still in for a long haul on the road to recovery.
The severe lack of liquidity has hampered the wider economy dragging it deeper into recession. A much more regulated structure in the finance sector will continue to mean a cautious approach by the banks and this will shape the speed and extent of the recovery of the London office market for the next few years. At present the severe lack of debt available is continuing to stifle the market for home based investors especially, and focus continues to remain on active portfolio management, something which has prompted British Land to review its holdings with a 50% interest sale of Broadgate to US private equity firm Blackstone.
Occupier demands have shifted and a new, leaner and more efficient approach to space management will mean that a restriction on new office space demand is likely to continue as outgoings continue to be minimised.
The natural cycle of the London office market means that supply is always likely to experience periods of constraint. In addition, the local context for development at sub-market level, including planning policy, means that there are locations which have a tendency to be more supply restricted than others. The result for these areas is higher costs for office occupiers.
It is important, however, to take a long-term view to ensure that there is an adequate supply of office land for future development to meet the potential need for offices arising from projections of employment change. And if the economy recovers as predicted in 2012-2014, we are at present likely to see a restricted supply of stock.
The question asked at the start of the recession was, “Is the impact on the financial services sector purely cyclical or part of a
long overdue alteration to the regulation in the finance sector? “ I think it is clear that it is a bit of both, with the natural cycle of peak and trough heightened by a panic filled finance market, exposed following years of overconfident investment.
As some are saying, we appear to be moving out of the naughty noughties and into the lean and probably mean teens. The banking sector is being overhauled since the availability of cheap debt and foolhardy lending activity has dried up and we are set to see a much greater regulated structure going forward where availability of debt is harder to come by, carrying many more restrictions. This is likely to mean that subsequent market activity will remain contained. Rewards are certainly there for those with access to debt and those active now could become key players in the market of tomorrow.
It is important to remember that at some point the economy will recover, demand will show steady signs of growth, confidence will return to the investment and development community and values/rents will turn up. The market seems to be nearing the first rung on this ladder but whether the finance industry and subsequent development will respond in time to prevent a shortage of stock in the next upturn, we are clearly still uncertain.
City core
Take up
Take up in the City core improved again this quarter, and is up by 29% on last quarter and 234% on this time last year. This increase was purely due to lettings of secondhand space and stock under construction. Secondhand stock saw activity increase by 155% with lettings totalling 734,000 sq ft. The largest deal of this grade was when the Bank of China took 115,600 sq ft at the Bank of England’s 1 Lothbury, EC2.
The largest transaction of the quarter, and the sole letting of stock under construction, came at St Botolphs, EC3, where Clyde & Co has taken a prelet of 144,000 sq ft on the 10th-13th floors.
Lettings of new stock fell this quarter dropping by 39% on Q3, but still up by 1305% on the extreme lows of this time last year. The largest transaction out of the 463,000 sq ft taken was at the Atlas Capital and Aviva owned 20 Gracechurch Street, EC3, where Catlin Underwriting has taken 123,000 sq ft. No premarketed space was taken this quarter.
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Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 08 Q1 0 8 Q4 0 7 Q3 07 Q2 07 Q1 07 Availability rate
1 Lothbury, EC2: Bank of China purchases long leasehold for occupation
30 King Street, EC2: Rent of £45 per sq ft released Take up(sq ft) Q4 09 % +/-24 months % +/-12 months % +/-3 months New/Refurb existing 462,554 706.81 1304.57 -38.56 Premarketing - n/a -100.00 n/a Secondhand 734,005 56.60 123.44 154.46 Under Construction 144,101 -25.67 437.63 n/a Total 1,340,660 86.23 233.85 28.75 Supply(sq ft) Q4 2009 % +/-24 months % +/-12 months % +/-3 months New/Refurb existing 2,918,174 1120.63 21.68 -14.12 Premarketing 7,322,182 -15.76 -4.73 0.18 Secondhand 4,398,349 41.90 37.31 -0.78 Under Construction 1,751,791 -69.52 -54.29 -7.60 Total 16,390,496 -7.81 -4.26 -3.79
The volume of space placed under offer was down by 13% on Q3 with a total of 557,000 sq ft receiving interest. The largest potential deal is at Drapers Gardens, EC2, with BlackRock in talks of taking upwards of 230,000 sq ft.
Supply
Supply in the City core fell in Q4 dropping by a further 4% on Q3 and this time last year. The improved level of take up has helped contain the increasing amount of secondhand space being shed, and all grades have seen a decline with the exception of premarketed stock, which has remained at the same level as last quarter.
The largest decrease saw supply of new stock fall by 14% on Q3. This was a result of space being withdrawn from the market with the largest retraction removing the fourth floor measuring 17,800 sq ft at 14 Cornhill, EC3.
Supply of stock under construction fell by 7.6% this quarter. This was largely due to the letting at St Botolphs, EC3. The availability of secondhand space fell marginally, slipping by 0.78%, despite a marked improvement in take up. The largest new addition to the market was of this grade at 2 Minster Court, EC3, where an additional 55,000 sq ft is now available after Moodys Investors services vacated. The availability of premarketed stock has remained unchanged this quarter., standing at 7.3 million sq ft.
Availability rate
The availability rate in the City core has been contained this quarter and has moved in from 13.46% to 12.54%. This has been a result of a marked improvement in take up activity and a limited supply of stock, with completions continuing to be pushed back to protect the market. Despite this the rate is now the highest in London after overtaking the City fringe. There is 930,000 sq ft of speculative stock set to complete in 2010, but how many of these schemes will continue to be sidelined remains to be seen. Demand for good quality stock in the City has certainly been on the up, and any new space which does complete is likely to be absorbed quickly due to the lack of options currently available.
The amount of space withdrawn from the market has risen again increasing from the 114,100 sq ft in Q3 to 133,300 sq ft spread over 12 properties. The largest retraction of space saw 33,200 sq ft of secondhand stock taken off of the market at Cobham House, 20 Blackfriars Lane, EC4, where the lease available is set to expire.
London Offices market analysis
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Secondhand New build (existing)
Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 0 8 Q1 0 8 Q4 0 7 Q3 07 Q2 07 Q1 0 7 Asking rents 0.0 0.3 0.6 0.9 1.2 1.5 sq ft (m)
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Still available Completed Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 08 Q1 08 Q4 07
Completed space actively marketed
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Still available To complete Q2 12 Q4 11 Q3 11 Q1 11 Q4 10 Q3 10 Q2 1 0 Q1 10
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Prelet Speculative Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 08 Q1 08 Q4 07
Construction starts with prelets
Cheesegrater, EC3: Scheduled start for Q1 2010
88 Wood Street, EC2: Rockspring purchases freehold for £183m
Asking rents
The slide in average asking rents has halted this quarter with both new build and secondhand rents beginning to stabilise after four straight quarters of decline. The averages now stand at £42.25 and £32.50 per sq ft respectively.
The new build average has held steady following the release of a rent of £45 per sq ft on the ground and first floor at 30 King Street, EC2. There were also no rental reductions seen this quarter for this grade of space.
The average rent for good quality secondhand space also remains unchanged. Despite the loss of the top end rent of £55 per sq ft, previously quoted at 5 Aldermanbury Square, EC2, prior to a letting to FBN, the removal of the low rent of £5 per sq ft at Atlas House, 1-7 King Street, EC2, after the space was withdrawn from the market, has helped balance the figures.
Construction
Construction activity has been hit hard in Q4 2009 with no new starts getting underway, as with Q3, and no completions taking place.
Of the 1.65 million sq ft set to complete in 2010, 930,000 sq ft remains speculative. The largest scheme set to be finalised is at St Botolphs, EC3, where 522,000 sq ft is scheduled for completion in Q2, with half of the space prelet to Clyde & Co and Lockton International. Elsewhere the 93,000 sq ft new build behind the existing façade at Princes House, 93-95 Gresham Street, EC2, is expected in Q1 2010 with all of the space still speculative.
Two starts are scheduled for 2010, the largest being British Land’s 588,000 sq ft Cheesegrater site on Leadenhall Street, EC3. However it is uncertain when this build will actually get off the ground, and it is likely to take a prelet to get the construction phase in progress.
Investment
The volume of investment transactions remains the same as last quarter, with properties totalling one million sq ft having been sold. Three of these were part of a portfolio disposal as CB Richard Ellis Investors sold Cutlers Exchange, Cutlers Court and 117-119 Houndsditch, EC3 to Henderson Global Investors for £35.2 million, reflecting a yield of 11.25%.
The largest sale took place at 88 Wood Street, EC2, where Rockspring purchased the freehold interest from ING Real Estate on behalf of the Korean National Pension Service for £183m.
West End
Availability rate 101 New Cavendish Street, W1: University of Westminster takes 45,000 sq ft 2 Kingdom Street, W2: 50,000 sq ft let to AstraZeneca Take up(sq ft) Q4 2009 % +/-24 months % +/-12 months % +/-3 months New/Refurb existing 253,413 35.40 382.29 290.65 Premarketing - n/a n/a n/a Secondhand 624,848 7.54 53.93 34.71 Under Construction 49,354 -54.65 n/a n/a Total 927,615 5.77 102.32 75.45 Supply(sq ft) Q4 2009 % +/-24 months % +/-12 months % +/-3 months New/Refurb existing 1,189,680 543.39 177.23 63.78 Premarketing 1,361,073 -26.67 14.86 0.00 Secondhand 5,207,354 118.75 39.44 -7.21 Under Construction 383,234 -68.78 -78.91 -65.84 Total 8,141,341 44.12 13.61 -7.71 2 4 6 8 10 12 %C
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Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 08 Q1 0 8 Q4 0 7 Q3 07 Q2 07 Q1 07
Take up
The West End has performed well this quarter with take up rising again, up by 75% on last quarter and 102% on this time last year. This increase has been a result of an improvment in lettings of new build stock, up by 291%, and secondhand stock, up by 35%. The letting to the University of Westminster at 101 New Cavendish Street, W1, boosted the volume of new stock taken by 45,000 sq ft along with the 28,000 sq ft let to Heidrick & Struggles International at Iona, 40 Argyll Street, W1. The 21,000 sq ft lettings to Kardamyla Holdings at 10 Lower Grosvenor Place, SW1, and National Savings & Investments at 1 Drummond Gate, SW1 contributed to the rise in take up of secondhand stock.
The improved level of take up has also been down to almost 50,000 sq ft of stock under construction being taken following the letting to AstraZeneca UK at 2 Kingdom Street, W2, where construction has since completed. This was also the largest transaction in the West End this quarter. Once again there has been no premarketed stock taken.
The volume of space placed under offer fell this quarter and is down by 46% on Q3 with 189,000 sq ft of potential deals in the pipeline. The largest possible letting is at Haymarket House, 28-29
Supply
The volume of supply has fallen in the West End this quarter, dropping by 8%, although it is still up by 14% on this time last year. This has been a result of improved take up activity which has contained the volume of secondhand space available, down by 7%. The largest new availability is of this grade at Southside, 105 Victoria Street, SW1, where almost 36,000 sq ft is now available on the sixth and seventh floors. Elsewhere 29,000 sq ft is now available at 19-22 Rathbone Place, W1.
Improved lettings of space under construction has meant that supply for this grade has fallen by 66%. The largest availability of this grade remains the 180,000 sq ft Quadrant Scheme, Regents Palace, W1. There have been no new additions to stock under construction this quarter.
Despite take up of new stock dramatically improving there has been a rise in supply levels this quarter. The amount of space available is up by 64% on Q3 and 177% on this time last year. This has not been due to additions to this market, as there has not been any, but a result of several completions taking place. The largest was
Availability rate
The improved levels of take up and restricted supply has stabilised the availability rate containing it at 10% after eight quarters of increase. There has been a handful of larger transactions this quarter which along with a continued demand for sub 10,000 sq ft units has helped prevent the availability rate from rising. With 790,000 sq ft of speculative stock set to complete before the end of 2010, demand must remain high if this rate is to remain restricted.
Haymarket, SW1, where 15,300 sq ft is under offer on the first floor. Elsewhere, 15,200 sq ft is set to be taken at Sheraton House, 15-19 Great Chapel Street, W1, by an undisclosed party.
at Regent’s Place, NW1, where the 373,500 sq ft office element has completed and remains available in its entirety.
The volume of space withdrawn from the market has fallen, dropping from 109,000 sq ft last quarter to 68,000 sq ft in Q4. The largest retraction came at 10 Grosvenor Street, W1, where 11,200 sq ft has been withdrawn from the market on the third floor with London Diversified Fund Management UK still in occupation. Elsewhere, at 1 Knightsbridge, SW1, part of the second floor, comprising of 11,100 sq ft, has been removed.
London Offices market analysis
The Peak, 5 Wilton Road, SW1: Construction of 77,000 sq ft completed 40 60 80 100 £ per sq ft
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Secondhand New build (existing)
Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 0 8 Q1 0 8 Q4 0 7 Q3 07 Q2 07 Q1 07 Asking rents 0.0 0.2 0.4 0.6 0.8 1.0 sq ft (m)
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WARNING: THIS IS A TEMPLATE.
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Still available Completed Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 0 8 Q1 08 Q4 07
Completed space actively marketed
0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 sq ft (m)
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WARNING: THIS IS A TEMPLATE.
'SAVE AS' BEFORE MAKING ANY CHANGES
Still available To complete Q2 12 Q4 11 Q3 11 Q1 11 Q4 10 Q3 10 Q2 10 Q1 10
Completions with space available 0.0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 sq ft (m)
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WARNING: THIS IS A TEMPLATE.
'SAVE AS' BEFORE MAKING ANY CHANGES
Prelet Speculative Q4 09 Q3 09 Q2 09 Q1 09 Q4 08 Q3 08 Q2 08 Q1 0 8 Q4 07
Construction starts with prelets
10 Grosvenor Street, W1: 11,200 sq ft withdrawn
Asking rents
Asking rents for new build stock responded in Q4 going against the trend of the last three quarters. The average now stands at £75 per sq ft, substantially up on the £58 per sq ft of last quarter. This is due to just two quoting rents remaining, a rent of £55 per sq ft at Davis House, 129 Wilton Road, SW1, and a rent of £95 per sq ft at 23 Savile Row, W1, on the first-fourth floors.
In contrast, the average rent for good quality secondhand space has fallen for the fourth consecutive quarter. The average is currently £46.50 per sq ft down by £1.50 on last quarter. This has been a result of a low rent of £12.50 per sq ft being quoted on part of the lower ground floor at Charter House, 13-15 Carteret Street, SW1. There has also been a £10 per sq ft rent drop on the fifth and sixth floors at 39-40 Portman Square, W1, where the rent now stands at £69.50 per sq ft.
Construction
Construction starts have been minimal following the 315,400 sq ft of last quarter, with just 3,000 sq ft getting underway at 26 Charlotte Street, W1.
Completions in contrast, have shot up with 984,000 sq ft finalising, up by 280% on last quarter. Other than the already mentioned Regent’s Place, NW1, and 2 Kingdom Street, W2, Network Rail’s 160,600 sq ft refurbishment at 157-197 Buckingham Palace Road, SW1, has been finished. Elsewhere, phases 2 & 3 at Arup’s Site –on Fitzroy Street, W1, have now concluded with the 85,000 sq ft refurbishment by Derwent London set to be occupied by Arup, and outside Victoria Station the Peak, 5 Wilton Road, SW1 has been finished, and all of the 78,000 sq ft remains available.
Investment
Investment activity in the West End has improved for the third quarter running, with 25 transactions taking place. A total of one million sq ft was sold with the largest deal taking place at the United States Embassy, 24-31 Grosvenor Square, W1. Qatari Diar Real Estate purchased the virtual freehold interest from the US Government for an undisclosed sum, although the building was expected to raise around £400 million when it was put up for sale in 2008.
A private client of the Bank of Ireland sold the freehold of Windsor House, 42-50 Victoria Street, SW1 to London & Orient on behalf of a private Hong Kong investor. The private investor
