Skyline Report Summer 2017

Metropolis and Cityoffices are about to publish their bi-annual survey of office construction in central London.

 

  • The survey brings readers all the statistics on the 101 office schemes in central London currently under construction and tenant activity connected to those schemes, right up to date to June 2017.

 

  • The survey, compiled after many hours of street surveys, telephone research and crosschecking, takes a snapshot of the central London office construction in Q2 2017, recent completions, recent pre-letting activity and looks ahead to future pipeline projects that will shape the next three years.

 

  • The report looks at the volume of construction underway, lists the major new scheme starts and looks at the proportion of refurbishment space compared to new builds. The report breaks down office construction by London district: City, West End, Midtown etc, as well as major recent building completions.

 

  • The survey also looks at occupier demand, with recent trends in pre-letting including examples of recent deals and a comparison with each of the last ten years.

 

  • The report then turns to the future pipeline including the 29 schemes currently at site preparation stage and 200 schemes with planning consent awaiting a start date.

 

  • Finally, it concludes with some forecasts for London office development based on current trends and makes predictions for London occupier demand over the rest of 2017 based on Metropolis’ detailed London office tenant research.

 

The report will be available free of charge to Metropolis and Cityoffices subscribers. If you are interested in a subscription contact Andy King at andy@metroinfo.co.uk

Central London Office Lettings – April 2017

Central London office lettings in April 2017 recorded nearly 800,000 sq ft of deals from 41 mid-large size transactions (5,000 sq ft+) during the month.

The April figure represents a fall on the 1.05m sq ft sq ft of lettings in March, but remains close to recent the monthly average.

April was characterised by 13 office deals over 20,000 sq ft, which included Nex Group’s 111,000 sq ft sublet at Fruit and Wool Exchange: Wither’s 60,000 sq ft pre-let at 20 Old Bailey in London, EC4; BUPA taking 56,000 sq ft at Angel Court Tower, London, EC2 and Equinix taking 29,000 sq ft at the Pepper Store in EC2.

Financial services topped the table of lettings by sector, underpinned by the Nex Group deal, this was followed by business services bouyed by the serviced office sector and professional services with large deals involving Withers and DLA Piper. Property and construction also performed well helped by the lettings to M7 Real Estate and Sir Robert McAlpine. Office deals ‘under offer’ in central London rose to 3m sq ft and volumes are rising in nearly all submarkets.

By area, the City accounted for an improved 57pc of the office floorspace let in April at 440,000 sq ft – 50% up on the March level. The West End saw 160,000 sq ft of take-up. Midtown contributed 130,000 sq ft of lettings. Current London office demand is calculated to be around 3m sq ft in the City and 3m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 469,000 sq ft (60% of the monthly total), as transactions for new space maintained their recent strong showing.

Cityoffices and Metropolis are shortly to release its twice yearly Skyline report on the London office construction market. The summer report features details of the 100 schemes under construction and the trends for the next wave of schemes. Details on Cityoffices from Andy King at andy@metroinfo.co.uk

Corporate Fit-Out Winners 2012-2016

 

 

 

 

 

 

 

 

London Top 10’s

The Corporate Fit Out Winners 2012-2016

Metropolis Property Research has just released its latest report for the period 2012-2016 on the central London office fit-out market.

The report provides Top 10 Rankings for those firms involved in ‘CAT B’ projects for corporate occupiers taking new space for interior design, project management, fit-out ‘build’, and agents advising tenants.

 

The No 1 TOP 10 firms are:

No 1 Interior Architect  – TP Bennett

TP Bennett has been ranked as London’s No 1 interior architect with 4.7m sq ft of interior design projects for corporate occupiers taking new space 2012-2016.  This is 29% market share amongst the named TOP 10 firms.

 

No 1 Fit Out Contractor – ISG

ISG has been ranked as London’s No 1 fit out contractor with 5.0m sq ft of fit-out projects for corporate occupiers taking new space in 2012-2016.  This is 33% market share amongst the named TOP 10 firms.

 

No 1 Interior Project Manager – CBRE

CBRE has been ranked as London’s No 1 project manager on interior fit out projects with 3.5m sq ft of projects for corporate occupiers taking new space 2012-2016.  This is 24% market share amongst the named TOP 10 firms.

 

No 1 Tenants Agent – CBRE

CBRE has been ranked as London’s No 1 tenant agent with 6.2m sq ft of occupier deals done on new office space 2012-2016.  This is 30% market share amongst the named TOP 10 firms.

 

 

Editorial Notes

In the five-years covered by the research (2012-2016) a total of 57.3m sq ft of new office space has been let in central London. The report has looked at deals of 2,322 sq m (25,000 sq ft) and over – which are the focus of the analysis – and amount to 30.3m sq ft of office space fitted out in 433 projects.

The report ‘London Top 10’s – The Corporate Fit Out Winners 2012-2016’ is available from Metropolis Property Research.   For details please contact simon@metroinfo.co.uk

 

About Metropolis Property Research Ltd

Metropolis Property Research is an independent research and information company established in 1998.   The company carries out research into the London and UK office markets and corporate relocation leads.

Metropolis Website and Blog – http://www.metropolisleads.uk

 

Copyright Metropolis Property Research Ltd 2017

November 2016 Central London Lettings

Central London office lettings in November 2016 recorded nearly 1,050,000 sq ft of deals from 45 mid-large size transactions (5,000 sq ft+) during the month.

The November figure represents a rise of 17% from the 900,000 sq ft total in October and a rise in the number of office deals over the month.

November was characterised by 10 office deals over 20,000 sq ft, which included Freshfield’s 300,000 sq ft pre-let at 100 Bishopsgate, EC2; Fidelity took 105,000 sq ft at 4 Cannon Street, EC4 and WeWork took 72,000 sq ft at The South Bank Tower, SE1.

Professional services topped the table of lettings by sector, underpinned by the Freshfields deal, along with big lettings to Olswang and Nabarro, followed by the financial sector, boosted by deals to Fidelity and EQT. Business services also performed well helped by more lettings to WeWork. Office deals under offer in central London fell slightlt to 2.5m sq ft after deals in the City and one in Southbank.

By area, the City accounted for only 78pc of the office floorspace let in November – a big increase on the 18pc in October. The West End saw 70,000 sq ft of take-up. Midtown contributed 20,000 sq ft of transactions, but Southbank again performed well with 70,000. Current London office demand is calculated to be around 4m sq ft in the City and 3m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached a remarkable 800,000 sq ft (76% of the total), as transactions for new space kept momentum.

Take-up in central London for January to November 2016 has so far reached 9.4m sq ft with December to come. With two or three large lettings pencilled in the yearly total could touch 11m sq ft.

Cityoffices wishes all its readers a Merry Christmas and prosperous New Year.

Central London Lettings August 2016

Central London office lettings in August 2016 recorded just over 580,000 ft of deals from 41 mid-large size transactions (5,000 sq ft+) during the month. The August figure represents a fallback from the 850,000 sq ft total in July, but sees a rise in the number of deals over the month.

August was characterised by 10 office deals over 20,000 sq ft, including Moneysupermarket at 1 Dean Street W1; Dimensional Fund Advisors at 20 Triton Street, NW1; New Day at Kings Cross, N1 and Hampshire Trust Bank at 55 Bishopsgate, EC2.

IT services topped the table of lettings by sector, followed by financial services, boosted by the Dimensional Fund Advisors letting. Insurance and business services are also performing well. Office deals under offer in central London remain around 2.8m sq ft and include two large pending deals in Midtown.

By area, the City accounted for 33pc of the office floorspace let in August. The West End saw 250,000 sq ft of take-up. Southbank had a good month with 80,000 sq ft of transactions. Current London office demand is calculated to be around 4.2m sq ft in the City and 3.1m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 239,000 sq ft (41% of the total), as transactions for new space kept momentum.

New research from Metropolis reveals there are some 400 medium/large companies in central London which have yet to make decisions on leases due to expire in 2017.

22m sq ft of office demand

Metropolis 2015 UK Research Review

The Metropolis research team produced a total of 6,439 relocation, construction and refurbishment leads in 2015.  1,195 new office requirements were identified in total,  accounting for 22m sq ft of demand from companies looking for new office space.

62% of Metropolis leads were projects located in the South of the UK, with 38% of lead projects located in Wales, the Midlands, North, North West, Yorkshire & Humberside, Scotland and Northern Ireland. Greater London projects represented 44% of the 2015 lead total.

 

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Greater London

In Greater London, Metropolis identified  just over 16m sq ft of requirements for offices, with over 827 companies looking for new space. About 12.6m sq ft of this demand was for central London space. The top 5 most sought after postcode areas by demand were:  EC2 (2.2m sq ft), W1 (2m sq ft),  SW1 (1.7m sq ft),  EC3 (1.3m sq ft) and E14 (1.2m sq ft).

 

South East

The number of leads in the South East (not including London) jumped by 22% when compared to 2014’s total. Over 150 office requirement leads were researched in the region in 2015,  representing just over 3.5m sq ft of office demand. The largest office requirements centered on RG1 and SL1 postcodes, including several 9,290 sq m (100,000 sq ft) + requirements from energy, media, pharmaceutical and technology companies.

 

North West

Office relocation and refurbishment activity continued to be strong in the North West, particularly between 186 sq m (2,000 sq ft) and 929 sq m (10,000 sq ft) projects.  Just over 2m sq ft of office demand was identified in the region, the largest requirements centered on the Greater Manchester area. About 60 Manchester companies were linked with searches for new space, around 1.5m sq ft of office demand.

 

Scotland

Leads numbers in Scotland were slightly up on 2014’s result (3.5% up). The region remains the UK’s 4th most active in terms of the number of  Metropolis lead projects researched, but 3rd in terms of total office demand.  Metropolis identified 2.1m sq ft of office demand in Scotland as a whole in 2015, 1m sq ft of which was demand for Edinburgh space and 0.8m sq ft of which was demand for space in Glasgow.

Some of the largest requirements came from the banking and finance sector, which were mainly centered on Glasgow. The largest requirements for Edinburgh space came from the accountancy, law and technology sectors.

 

Yorkshire & Humberside

In Yorkshire and Humberside, just over 1m sq ft of office requirements were identified, with 115 companies looking for new space. Demand for new space in Leeds accounted for 0.8m sq ft.

 

West Midlands

West Midlands lead numbers were up 21% on the 2014 total. Just over 1m sq ft of office demand was identified in the region, 0.7m sq ft in Birmingham. About 180,000 sq ft of office demand was identified in Coventry, boosted by a 100,000 sq ft requirement from an energy company.

 

South West

In the South West, just over 0.5m sq ft of new office demand was identified. Bristol was the preferred location in the South West for large insurance and law sector moves.

 

North

Lead numbers in the North increased significantly for the second year running, up 29% on 2014. About 0.6m sq ft of office demand was identified in the region, 0.2m sq ft in Newcastle.

 

East Midlands

Lead numbers in East Midlands were slightly up on the five year average. The largest requirements mainly came from the manufacturing and retail sectors looking for distribution space with offices.

 

East of England

East of England lead numbers were up 33% on 2015’s total. The top five office requirements by size came from technology, pharmaceutical, accountancy and law sector companies. Office demand tracked in Cambridge reached 0.4m sq ft.

 

Wales

The largest office requirements in Wales came from the Public sector, with a 130,000 sq ft requirement from a government department  looking in Cardiff. However there were also two 100,000 sq ft requirements from law and insurance firms also looking in Cardiff, where total office demand was just over 0.5m sq ft.

 

Northern Ireland

The largest office requirements unsurprisingly came from Belfast occupiers, with government, accountancy and technology sectors the most active.

 

 

UK Lead Projects By Size

50% of Metropolis leads in 2015 reported on projects over 10,000 sq ft. 44% of leads were made up of projects between 5,000 sq ft and 30,000 sq ft. 68% of leads covered projects over 5,000 sq ft.

 

4Leadsbyprojectsizeuk

 

 

 

 

 

 

The increase in lead projects between 2,000 and 5,000 sq ft was  significantly influenced by added investment into regional research by Metropolis, particularly in the South East, West Midlands and South West.

A significant number of new office mover leads, typically 20 to 50 staff relocations,  were identified in these areas in 2015.

The 40 and 50 redevelopment schemes in London that effected existing tenants in 2015 also contributed to an increase in the proportion of these lead projects.

These schemes, which include demolition and refurbishment of existing buildings,  forced hundreds of SME office occupiers to find new space, the significant proportion of which occupied between 1,000 and 5,000 sq ft.

 

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UK Lead Numbers by Sector

The Banking & Finance Sector just edged ahead of  Technology & Telecoms leads in 2015 and was the most active UK business sector in terms of relocation and refurbishment projects. Lead numbers fell by 8.5% when compared to 2014’s strong result,  but were still about equal to the five year average.

The largest requirements in this sector were focused on space in Docklands and London EC2. The largest office lettings were on space in London EC4 and EC2.

7leadsbybusinesssectorukchart

 

 

 

 

 

Office demand from the technology and telecoms sector was just over 3m sq ft. Two of the top five largest requirements for new space from the T&T sector came from social media companies, both seeking in excess of 100,000 sq ft of space in the West End of London.

The majority of requirements for new space over 50,000 sq ft centered on London, but there were notable exceptions, including a 150,000 sq ft requirement for space in Cambridge from a US Software firm and a 100,000 sq ft requirement for offices in Warrington from a US computer manufacturer.

Office demand from media sector companies, often grouped with Technology and Telecoms under the banner “TMT”, reached 2.5m sq ft.

Central London, particularly SW1, W1 and WC2, was the overwhelmingly preferred location for this sector. The largest media requirement outside of London came from a media broadcaster looking for 150,000 sq ft in the Thames Valley.

Demand for new space in the law sector focused on London EC2, with three 200,000 sq ft + requirements for new space in this postcode.  Outside of London, the largest office requirements centered on Manchester and Birmingham.

 

Copyright Metropolis Property Research Ltd 2016

Metropolis London Skyline Report

The London Wrecking (Christmas) Ball

or “What Comes Down Must Go Up”

abridged

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Metropolis and Cityoffices have completed their bi-annual ‘Skyline’ survey of the central London office development market for the period April 2015 to October 2015. The survey takes a snapshot of the central London office construction in Q4 2015, recent completions, recent pre-letting activity and looks ahead to future pipeline projects that will shape the next three years.

There are now 78 office schemes under construction in central London (compared to 74 six months ago) totaling an increased 11.1m sq ft (9.5m sq ft in April 2015). In the last six months there have been 31 new scheme starts, totaling 3.4m sq ft, including major new-builds such as the 866,000 sq ft 100 Bishopsgate in EC3, the 400,000 sq ft 10 Fenchurch Place in the City of London and the 228,000 sq ft 33 King William Street (33 Central) in EC4.

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The City dominates construction with 6m sq ft of new office space in schemes now underway (up from 4m sq ft in early 2015). There is now 500,000 sq ft of office space under construction at Kings Cross, with more at site clearance stage. The West End, including Paddington, has 2.7m sq ft under construction and a further 600,000 sq ft of office build is on-site in Midtown, but Southbank and Docklands still lag behind the rest of London.

The big story is the forthcoming space at demolition stage, with over 7m sq ft lined up to start in early 2016 and more to follow later in the year. In reality, further schemes currently at planning stage will add to these numbers, particularly the 2017 and 2018 totals. Therefore we expect development completions in 2017 and 2018 could reach 7-8m sq ft.

Looking ahead, some 33 future schemes are currently at site preparation stage with 7.2m sq ft of additional office space due to go under construction in the next 6 months. Many of these schemes will not be completed until 2017 or 2018, however it is clear there is a strong development pipeline.

 

The full Skyline report is currently available to Metropolis clients. Further details on the Metropolis service can be found at http://www.metroinfo.co.uk.

Copyright Metropolis Property Research Ltd 2015