Central London office lettings in October 2018

Central London office lettings in October 2018 reached just over 1.3m sq ft from 55 mid-large size office transactions (5,000 sq ft+) during the month. The October 2018 figure exceeds the current monthly London average of 1m sq ft.

October was characterised by 19 office deals over 20,000 sq ft, which were led by the McCann World Group’s 135,000 sq ft pre-let at 135 Bishopsgate, EC2 along with TP ICAP; BGC Partners signed for 129,000 sq ft at 5 Churchill Place, E14; Axa IM took a 65,000 sq ft pre-let at 22 Bishopsgate, EC3 and DAC Beachcroft took 50,000 sq ft at Walbrook Building, EC4.

Financial services topped the table of lettings by sector, compiled by Metropolis, underpinned by the TP ICAP and BGC Partners deals. This was followed by media led by lettings to McCann and TNS. Insurance, professional and business services were also well represented. Office deals ‘under offer’ in central London remained at 3.8m sq ft, and pending deal volumes are healthy in nearly all sub-markets, with a number of deals pending.

By area, the City accounted for 58pc of the office floorspace let in October 2018 at 750,000 sq ft. The West End saw 140,000 sq ft of take-up. Midtown contributed 100,000 sq ft of lettings and Docklands 130,000 sq ft. Current London office demand is calculated to be around 3.7m sq ft in the City and 3.2m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month, reached a healthy 555,000 sq ft sq ft (43% of the monthly total), as transactions for new space resumed their recent strong showing. Availability is dominated by secondhand space in all London markets.

Metropolis research is currently monitoring 630 ‘live’ London requirements, with deals for space of up to 1.6m sq ft due to sign in the next few months.

Cityoffices is close to completing on its autumn ‘Skyline Survey’ in London. Further details of office scheme planning applications and consents, with scheme by scheme detail are listed on the Cityoffices.net website. Details on Metropolis and the Cityoffices database from Andy King at andy@metroinfo.co.uk

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Leading the Market – Metropolis Movers

In a short departure from our normal focus on the UK office market, this week Metropolis Blog looks at the Metropolis Movers Leads Service.

Metropolis has become the biggest and best office relocation leads service through its focus on market intelligence lead research.

Unlike other lead providers Metropolis concentrates on non-published, tenant activity led research.

This means utilising hundreds of business sector reports, tapping into industry contacts, drilling deep into property sources and making full use of social media.

The experienced Metropolis team has years of experience of talking to office occupiers and is skilled at uncovering advance information of agency instructions, fit-out tendering, removal, furniture and IT contract opportunities.

Leads are written with an understanding of client needs with clear indications of size, timescale and triggers. In addition, all leads give clients multiple channels to contact the occupier, such as phone, email or Linkedin.

The weekly output of over 130 carefully researched leads is backed by a steady stream of blogs, statistics and reports on trends in the market.

Manchester Offices and the Tech Sector

Knight Frank has recently published a report on Manchester’s  office market and the impact of the technology sector.

The consultant says that the city has evolved a significant tech market. Take-up within the Manchester market over the last five years (2013-17) shows that there were some 144 leasing transactions from occupiers within the IT & Telecoms sector. These deals accounted for more than 770,000 sq ft of office space – that is a volume of space greater than total 2017 take-up across all sectors in 6 of the 10 regional centres that Knight Frank monitor.

Notable transactions include: Amazon, Bet 365, Booking.com and Jaguar Land Rover, Recent research from Tech Nation, reveals that there are in excess of 30,000 digital jobs within the Manchester economy – which on generous space allocations of 1:8 is the equivalent to some 2.5 million sq ft of office space. These firms have a turnover of some £3.2bn – so they are significant contributors to the local and regional economy. The research also shows that Manchester has a vibrant digital eco-system which led to the birth of more than 450 new digital businesses in 2016. When those businesses are formed they have great growth prospects.

A third of Tech Nation’s Northern Tech 100 – that is the fastest growing tech companies in the North of England – are based in Manchester and have an average growth rate of 49% per annum. Four of the companies found on the list have recently let or acquired a total of 80,000 sq ft with a further 17,500 sq ft under offer at the time of writing.

Knight Frank are also aware of active requirements totalling around 100,000 sq ft from companies within the list. Microsoft, for example, have recently taken 100 desks within Bruntwood’s Neo Building
while both Amazon and Alphabet have a small presence in the city.

Over the same 5 year period there were 406 leasing transactions from companies across the 5 tech sub-sectors. They absorbed 1.4 million sq ft of office space over this time.

Knight Frank conclude that as Amazon and the like invest in the healthcare and insurance sectors, for example, the market will see space solutions that were not so long ago regarded as the exclusive domain of a few select, fast-growth tech companies becoming a reality for the many.

Metropolis Research is monitoring around 20 requirements in the Manchester market and 80 potential movers. Some 20% of companies are in the technology sector.