Central London office lettings in July 2019

Central London office lettings in July 2019 reached 1.1 million sq ft, from 40 mid-large size office transactions (5,000 sq ft+) during the month. The July 2019 deals volume figure is in line with the current monthly London average of 1m sq ft.

July was characterised by 15 office deals over 20,000 sq ft, which were led by BT’s 328,000 sq ft pre-let at One Braham, E1; Diageo’s 106,000 sq ft pre-let at 16 Great Marlborough Street and WeWork’s 88,000 sq ft at Queen Victoria Street.

Telecom topped the table of lettings by sector, compiled by Metropolis, underpinned by the BT pre-let. This was followed by business services led by WeWork, Office Group and Knotel. The food and drink sector was also prominent with the Diageo West End prelet.

Office deals ‘under offer’ in central London rose to 4.1m sq ft, and pending deal volumes are healthy in nearly all sub-markets, with a number of deals in solicitor’s hands.

By area, the City accounted for 60% of the office floorspace let in July 2019 at 615,000 sq ft. The West End saw 319,000 sq ft of take-up. Docklands 76,000 sq ft, Midtown contributed 90,000 sq ft of lettings and Southbank 66,000 sq ft. Current London office demand is calculated to be around 3.9m 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 550,000 sq ft sq ft (33% of the monthly total), as transactions for new space maintained the recent strong showing. Availability is dominated by secondhand space in all London markets.

The large number of upcoming lease events in the core has been a key driver to mover activity .Metropolis research is currently monitoring 625 ‘live’ London office requirements, including a large volume of requirements from the banking and finance sectors, with pending deals for space of up to 1.5m sq ft due to sign in the next few months.

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The Triggers for Relocation

Recent research by Metropolis Property Research on its 6,400 office occupier relocation leads in 2018, suggested that nearly 50% of moves were triggered in some part by lease events, either expiries or break options. Some 3,112 office leads made some reference to a lease expiry in 2018. Of the remainder, the majority were mostly either expansions, start-ups or mergers.

The research chimes with a recent report on office occupiers the Thames Valley by property consultant Lambert Smith Hampton (LSH).  It says that triggers for 2018 corporate relocation remain more or less on trend with the previous 5 years. LSH say that moves predicated on a lease event are slightly less prevalent at 40% than they were when the research was started in 2012 (43%), but still make up a large part of the market. For example see Riverbed Technology (Metropolis lead id 120785), JDA International (id 122285) and Midwich (id 121691) moves in Bracknell alone in 2018 . In 2015-16, the percentage of relocations triggered by a lease event was down to 36%, however LSH point to a high proportion of merger and acquisition activity (20%) that same year which forced some occupiers to relocate to accommodate such activity ahead of a lease expiry or break clause.

In 2012-13, expansion accounted for 34% of relocation triggers, however this has since grown to 38% in 2018 while merger and acquisition activity has reduced to 9%. LSH use the example of significant corporate expansion is provided by Oxford Nanopore Technologies (Metropolis lead id 121255) which freehold purchased the Danby Building on Oxford Science Park. The 55,000 sq ft deal came alongside their pre-let of a 35,000 sq ft manufacturing/R&D base at Harwell. This type of occupier is synonymous with the current Oxfordshire market; huge expansion as funding is being increased both from the University and globally.

Location, location, location remains the predominant criteria when relocating and some 37% to 50% of occupiers specify moves to particular districts over the last 6 years, but it is always the majority influencer. Alongside location is betterment, as occupiers desire to improve the quality of their working environment. The number of companies looking for better quality workspace has increased from 22% in 2012 to 34% in 2018. At the same time cost has reduced in importance over the period of the research from 22% down to 11%, albeit up from 6% in 2016.

Occupiers are more and more seeking better working environments in order to attract and retain the best staff and maximise productivity. LSH point to corporate occupiers coming to the market seeking more cost effective space only to change their minds and commit to better space having reviewed and evaluated the options. Mobile Broadband Networks (Metropolis id 121223) were seeking sub £30 per sq ft space in Reading only to move to Thames Tower at £35 per sq ft despite there being cheaper space available nearby. Occupiers often lean towards better space both in terms of quality and amenity once options are shortlisted

Looking into the future, Some 3,000 occupiers are looking for space in 2019 in advance of lease events with more at an early stage in advance of 2020 lease events. The number of occupiers asking for more fitted and furnished office space has risen considerably. This may be as a result of flexibility and Brexit concerns and is related with the demand for shorter leases.

Paul Ives Metropolis Head of Research. paul@metroinfo.co.uk

Metropolis Movers January 2019

Metropolis ran 653 business leads on ‘office movers’ in January 2019. If all reported moves were added together, the total would exceed 16 million sq ft of office searches and transactions, researched by Metropolis’ unique market-led intelligence research team, last month.

London was the largest region with 336 business leads during month, but there were also strong showings from the North West (56), South East (50) and Yorkshire (44). Financial services, IT and business services were the largest business sectors planning relocations or agreeing moves during the month.

The relocation leads geographically covered the whole UK and provided details of the size of the office occupier,  likely move dates, a description of the reasons or trigger for the move, its business sector and full contact details including an address for written inquiries, at least one telephone number and in most cases an email address. Some of the largest planned moves and top picks amongst the 653 January leads, included those on occupiers Nomura Bank, BNY Mellon, Virtus Data, Brewin Dolphin and Merck & Co .

The January 2019 leads included 201 ‘identified requirements’ across the UK, including 120 in London. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 201 searches, 117 were newly posted office searches, not previously notified to clients.

The most recent research also included 202 ‘potential movers,’ which were mainly longer-term leads on occupiers, considering a future relocation, however the occupier has yet to make a final decision on whether to search for offices.

Most of the remaining stories covered companies that have just signed for new office space and have set a move date, including some large pre-lets and companies inviting tenders for fit-out contracts. The shortest planned move date is just over a month away, whilst the longest was late 2021.

Recent research by Metropolis concluded that a conservative estimate of ‘live’ business tender opportunities on the database in recent months, exceeded £1bn of business.

 

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.

Metropolis Movers September 2018

Metropolis ran 535 business leads on ‘office movers’ in September 2018. If all reported moves were added together the total would exceed 13 million sq ft of office searches and transactions, researched by Metropolis’ unique market-led intelligence research team, last month.

London was the largest region with 270 business leads during month, but there were also strong showings from the South East (53),  North West (52) and Yorkshire (40). Financial services, IT and business services were the largest business sectors planning relocations or agreeing moves during the month.

The relocation leads geographically covered the whole UK and provided details of the size of the office occupier, company likely move dates, a description of the reasons for the move, its business sector and full contact details including an address for written inquiries, at least one telephone number and in most cases an email address. Some of the largest planned moves and top picks amongst the 535 September leads, included those on occupiers Apple, Santander, EBRD, PWC and UK Hydrographic .

The September 2018 leads included 175 ‘identified requirements’, including 105 in London. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 175 searches, 110 were newly posted office searches, not previously notified to clients.

The most recent research also included 153 ‘potential movers,’ which were mainly longer-term leads on occupiers, considering a relocation, but the occupier has yet to make a final decision on whether to search.

Most of the remaining stories covered companies that have just signed for new office space and have set a move date, including some large pre-lets and companies inviting tenders for fit-out contracts. The shortest planned move date is just over a month away, whilst the longest was late 2021.

Recent research by Metropolis concluded that a conservative estimate of ‘live’ business tender opportunities on the database in recent months, exceeded £1bn of business.

If you would like some information on flexible Metropolis subscription packages, then please email Andy at andy@metroinfo.co.uk, mentioning ‘Metropolis Blog’

Metropolis Movers in August 2018

Metropolis ran 601 business leads on ‘office movers’ in August 2018. If all reported moves were added together the total would exceed 15 million sq ft of office searches and transactions, researched by Metropolis’ unique market-led intelligence research team, last month.

London was the largest region with 309 business leads during month, but there were also strong showings from the South East (72),  North West (60) and Yorkshire (46). Financial services, IT and business services were the largest business sectors planning relocations or agreeing moves during the month.

The relocation leads geographically covered the whole UK and provided details of the size of the office occupier, company likely move dates, a description of the reasons for the move, its business sector and full contact details including an address for written inquiries, at least one telephone number and in most cases an email address. Some of the largest planned moves and top picks amongst the 601 July leads, included those on occupiers AstraZeneca, NTT Data, BNY Mellon, Booking.com and BGC International.

The August 2018 leads included 203 ‘identified requirements’, including 120 in London. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 203 searches, 104 were newly posted office searches, not previously notified to clients.

The most recent research also included 133 ‘potential movers,’ which were mainly longer-term leads on occupiers, considering a relocation, but the occupier has yet to make a final decision on whether to search.

Most of the remaining stories covered companies that have just signed for new office space and have set a move date, including some large pre-lets and companies inviting tenders for fit-out contracts. The shortest planned move date is just over a month away, whilst the longest was late 2021.

Recent research by Metropolis concluded that a conservative estimate of ‘live’ business tender opportunities on the database in recent months, exceeded £1bn of business.

If you would like some information on flexible Metropolis subscription packages, then please email Andy at andy@metroinfo.co.uk, mentioning ‘Metropolis Blog’

Central London office lettings in July 2018

Central London office lettings in July 2018 reached just over 1.4m sq ft from 41 mid-large size office transactions (5,000 sq ft+) during the month. The July 2018 figure is comfortably above the current monthly London average of 1m sq ft.

July was characterised by 15 office deals over 20,000 sq ft, which were led by the Facebooks’s 600,000 sq ft deal to pre-let 11/21 Canal Reach and Building P2 Handyside Street, N1; WeWork’s 131,000 sq ft deal at Aviation House, WC2 and Houlihan Lokey’s 41,000 sq ft move to 1 Curzon Street, W1.

IT and technology services topped the table of lettings by sector, compiled by Metropolis, underpinned by the huge Facebook deal, plus a deal to Benevolent AI. This was followed by business services led by a number of lettings to WeWork and The Office Group. Financial services, professional and media were also well represented. Office deals ‘under offer’ in central London increased to 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 7pc of the office floorspace let in July 2018 at 100,000 sq ft. The West End saw 276,000 sq ft of take-up. Midtown contributed a record breaking 950,000 sq ft of lettings. Current London office demand is calculated to be around 3.6m 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 800,000 sq ft sq ft (57% 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 650 ‘live’ London requirements, with deals for space of up to 1.7m sq ft due to sign in the next few months.

Cityoffices is working 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