Metropolis 2013 Research Review

REQUIREMENTS BOOST

The Metropolis research team produced a total of 6,537 relocation, construction and refurbishment leads in 2013. Over 26% of these were active UK office space requirements, in line with 2012 research results. 1,745 office requirements were confirmed in total, with 1,056 new office requirements uncovered by our research, up 6% on 2012’s total and 19% on 2011’s.New requirements accounted for over 22m sq ft of UK office demand.

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61% of Metropolis leads were projects located in the South of the UK (63% in 2012, 61% in 2011, 2010 and 62% in 2009), with 39% of lead projects located in Wales, the Midlands, North, Scotland and Northern Ireland. Greater London projects represented 45% of the 2013 lead total, a close match to the 2012 proportion (46%).  

Leads in Scotland saw a 120% increase when compared to 2012’s lead total, boosted in part by energy sector requirements in Aberdeen and an upturn in the Glasgow office market. West Midlands lead numbers saw an increase for the second year running, with several new Birmingham office requirements emerging from the law and insurance sectors. Results for other Northern  regions were broadly in line with expectations, with North West lead numbers slightly down on last year’s result but still up on 2011, 2010 and 2009’s totals.

London and South East lead numbers were very similar to 2012’s totals.  In terms of Greater London office requirements, the top 5 most sought after postcodes areas by demand were:  EC2 (3.6m sq ft),  W1 (3.2m sq ft),  EC4 (3m sq ft), SE1 (2.7m sq ft) and EC3 (2m sq ft).

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UK LEADS BY PROJECT SIZE – 53% of Metropolis leads in 2013  reported on projects over 10,000 sq ft. 46% of leads were made up of projects between 5,000 sq ft and 30,000 sq ft. 73% of leads covered projects over 5,000 sq ft.  The increase in lead projects between 2,000 sq ft and 4,999 sq ft can be attributed to the number of SME’s facing 2013 and 2014 lease ends and those launching searches for additional and larger space as market conditions improve.

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TOP TEN BUSINESS SECTORS – The Technology & Telecoms sector overtook Banking & Finance in 2013 as the strongest UK business sector in terms of relocation and refurbishment projects.   Lead numbers within this sector have grown year on year since 2009, making up 11% of all leads researched last year. If coupled with the Media sector under the popular designation of ‘TMT’, these two sectors were responsible for 32% of the top ten. The largest new technology office requirements were centered on London and the Thames Valley, with a few notable new searches emerging in Cambridge and Edinburgh.

The Banking & Finance sector was pushed into second place last year, but still had a strong showing, on par with 2012 lead levels. Relocation and refurbishment leads on hedge funds and investment firms made up 33% of the sector total. 

Law firm leads saw a 23.5% increase when compared to 2012 lead numbers and we expect increased activity in this sector during 2014. The recently published Metropolis Law Report confirms we are tracking 140 active  law firm office requirements totaling 2.6m sq ft plus over 100 law firms with lease expiries or breaks coming up between 2014 and 2016.

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(C) Metropolis Property Research Ltd 2014

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