Metropolis Office Requirements – Q3 2014

9.5m sq ft of demand

Our team here at Metropolis researched over 370 UK company office requirements in Q3 2014, representing 9.5m sq ft of office demand.

6m sq ft of this demand was for space in Greater London and 4.9m sq ft was demand for space in central London.

Demand for City of London space continued to be strong during Q3, with 2.4m sq ft required in over 60 planned relocations. Three of the top five largest requirements in the City were searches by technology and media companies. EC2 demand made up 37.5% of the total space required.

1.4m sq ft of demand was identified in the West End of London, split equally between requirements for space in London SW1 and W1. Again three of the top five largest requirements were searches by technology and media companies, with two significant searches by financial service sector companies identified.

Mid Town office demand was largely focused on London WC2, with 100,000 sq ft of the 300,000 sq ft required in this postcode attributed to media sector requirements.

Just over 0.6m sq ft of demand was researched in London’s Southbank, 200,000 sq ft of which was triggered by an energy company’s requirement for additional space in the area.

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Similar to H1 results, the Banking & Finance sector is leading the demand for new UK offices, with 1.4m sq ft of requirements in the UK, just over 0.4m sq ft of which is sought in the City of London.

Requirements from media sector companies represented just over 1m sq ft of demand, a 300,000 sq ft requirement in London W1 significantly boosting this figure. Technology & Telecom sector requirements came a close third with 0.9m sq ft of demand. The law sector accounted for 0.8m sq ft of demand and the insurance sector 0.5m sq ft.

 

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Simon Sluszny October 2014

Copyright Metropolis Property Research Ltd

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London November Office Take-up

Central London office take-up in November 2013 reached 1,040,000 sq ft (deals of 5,000 sq ft or more). This brings the 2013 year to date total to nearly 10.7m sq ft in 500 deals, which is a 20% rise on the same point in 2012, according to research by http://www.cityoffices.net.

The November total was boosted by the 200,000 sq ft letting to Ernst & Young at 25 Churchill Place in Docklands. Lease terms continue to average ten years, with a break option in year five. Rents averaged just under £45 psf.

Liverpool market surge

A recent report by property consultant Knight Frank revealed an 82% surge in office take-up in Liverpool in the third quarter of 2013 compared to the same period in 2012.

Metropolis figures suggest around 60 firms have found office space in Liverpool this year including the 34,000 sq ft let at Albert Dock by law firm Hampton Hughes and 30,000 sq ft by the local NHS trust. There are around 20 medium to large firms which have a current requirement for offices in the city and overall named requirements total over 250,000 sq ft.

Potential movers include BT which has just announced a 20% increase in staffing at its Lancaster House call centre and a clutch of companies approaching 2014 lease expiries.

Office projects by Capital & Centric, Merepark and Peel Group promise a new wave of grade A space from mid-2014 onwards, but local agents think more space is required to satisfy all searches, which is likely to increase the number of refurbishments.

The rising pull of Birmingham

A recent report from property consultant Knight Frank on Birmingham’s office market highlighted a rise in office deals in 2013 which has seen nearly 514,000 sq ft transacted in the city this year, already overtaking Birmingham office take-up for the whole of 2012, with one quarter to go.

Large lettings in Q3 include deals to Deutsche Bank, Allianz Insurance, DAC Beachcroft, i2 offices and Dains

Birm

Looking ahead, Metropolis is monitoring some 25 live office requirements in Birmingham, with a further 40 office tenants making decisions on 2014 lease expiries soon.

Some of the tenants may be tempted by new space in the Birmingham pipeline at 158 Edmund Street (150,000 sq ft), 2 Cornwall Street (263,000 sq ft) 45 Stephenson Street (100,000 sq ft), One Trinity Park (50,000 sq ft) and 55 Colmore Row (153,000 sq ft).

 

Edinburgh office surge

A report this week by Edinburgh property consultant CKD Galbraith indicated that Q3 2013 office take-up in Edinburgh had reached 270,000 sq ft; which is up sharply on previous quarters.

The relocations announced were dominated by five big lettings: 85,000 sq ft at 3 Lochside Avenue to Sainsbury’s Bank; 33,000 sq ft to Jardine Lloyd Thompson at 7 Lochside Avenue; 55,000 sq ft at Capital House to Bank of New York Mellon; 32,000 sq ft at Atria One to PwC and Skyscanner taking a further 10,000 sq ft at Quartermile One. These five deals accounted for 80% of space transacted.

Research by Metropolis suggests there are still some 40 firms searching for space in Edinburgh, however most are looking for below 20,000 sq ft. A number of deals are currently ‘under offer’.