London Office Letting Forecast for 2019

Metropolis research suggests that despite the political uncertainty, the number of London office occupiers intending to move in 2019 remains in line with previous years. Confirmed office lettings in Q1 2019 are approaching around 2.5m sq ft, which is just below previous years. There are also a large number of companies awaiting a Brexit outcome before confirming move plans in the rest of the year.

Office market analysts report that Central London leasing activity continued to perform positively in 2018, however there remains fear of occupier inertia as a threat to leasing activity in early 2019 with leasing demand slowing in the early part of the year. JLL anticipate this is likely to be short lived as so much of today’s demand is structural – lease breaks and expiries – and a bounce back is expected in the latter part of the year. Tech employment is forecast to overtake banking and financial services in terms of total numbers employed. The tech sector is expected to take a larger part of London lettings during the next 12 months.

West End take-up is outperforming the 10-year average with the services sector was the most active. Some of the momentum was provided by Facebook’s acquisition of circa 600,000 sq ft in King’s Cross, followed by the business services sector with a share of 30% driven by flexible workspace providers. Flexible space is accounting for 22% of take-up volumes with several new entrants taking space including independent operators as well as British Land’s Storey and Brockton’s FORA.

Pre-letting remains a key driver of the leasing market and on an annual basis, pre-leasing accounted for 36% of take-up. Under offers in the West End are down slightly on the back of strong leasing volumes, but they remain well above the 10-year average, Active demand totalled 4.0 million sq ft and remains above the 10-year average Demand is being driven by business services followed by finance and media.

In the City, office take-up is surpassing the 10-year average with business service the most active, driven by the flexible workspace and insurance sectors. Flexible workspace providers continued
to expand rapidly, however the largest recent transaction to an insurance company was at Twentytwo Bishopsgate, EC2 where Beazley Group have pre-let 50,000 sq ft. WPP plc have pre-let 210,000 sq ft at 1 Southwark Bridge Road, SE1 and McCann have pre-leased 127,000 sq ft at 135 Bishopsgate, EC2.

In the City during 2018, pre-letting was at its highest level since 2000 in terms of volume and at peak levels in terms of proportion of activity (39%). Both space under offer and demand remain ahead of 10-year average levels. Space under offer is 1.4 million sq ft and active demand is 6.3 million sq ft.

In conclusion, trends in 2019 are likely to continue the patterns of 2018, albeit after a slow start in the first half of the year. However, the accumulated weight of demand and the impending pressure of upto a thousand lease expiries due over the next 12 months is likely to keep London lettings healthy.

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.

 

Metropolis Office Movers in February 2018

Metropolis ran 528 business leads on ‘office movers’ in the slightly  shorter month of February 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. London was the largest region with 235 leads during month, but there were also strong showings from the South East (50),  North West (48), Scotland (42) and Yorkshire (41).  IT and business services were the largest business sectors planning relocations or agreeing moves during the month.

The business leads 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 538 February leads, included those on occupiers Facebook, Anixter, Dar Al Handasah, Novartis and CAF Rail.

The February 2018 leads included 156 ‘identified requirements’, including 82 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 156 searches, 100 were new office searches, not previously notified to clients.

The most recent research also included 151 ‘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 2020.

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 Simon at simon@metroinfo.co.uk

Requirements on the Rise?

Over the first two months Metropolis Property Research has noticed a small rise in the numbers of office occupiers launching new searches for office accommodation.

Some examples researched and published over the past week include:

  • An IT support firm, has told Metropolis that it is currently searching for around 200 sq m (2,200 sq ft) of office space within the South Bank area of London. The firm is planning to move from its current base in the Autumn of 2018;
  • A City of London-based energy consultancy, has told Metropolis that it has appointed an un-named property agent to advise on relocation or lease options in central London, ahead of a late 2018 lease break option. The company currently occupies 465 sq m (5,010 sq ft) of offices with about 35 staff;
  • A computer consultancy firm, has told Metropolis that it is currently searching for around 475 sq m (5,100 sq ft) of office space in the Maidenhead area. Staff advise that a move date has not been set, but that it will likely take place around Autumn 2018.;
  • An energy exploration company, has strongly hinted that it is considering launching a search for alternative London West End offices in 2018;
  • An IT consultancy firm, has told Metropolis that it is currently searching for around 220 sq m (2,400 sq ft) of office space in Bristol. A senior contact has stated that an ideal move date would be around October or November 2018;
  • A Leeds headquartered print management company, is planning to open an office in London by 2020;

Metropolis researches around 140 new office requirements each month in the UK, plus hundred of other companies pondering move decisions and agreeing lettings.

Metropolis Office Movers October 2017

Metropolis ran 548 business leads on ‘office movers’ in the month of October 2017. If all reported moves were added together the total would exceed 8 million sq ft of office searches and transactions, researched by Metropolis’ unique market led intelligence research team. London was the largest region with 251 leads during month, but there were also strong showings from the South East (60), North West (40) and Scotland (36). IT services, professional and financial were the largest business sectors planning relocations or agreeing moves during the month.

The business leads covered the whole UK and provided details of the size of the office occupier, its 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 548 October leads, included those on Dentsu Aegis, Sumitomo Mitsui Bank, WeWork, Royal London Insurance and Dyson.

The October 2017 leads included 165 ‘identified requirements’. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 165 searches, 100 were new office searches, not previously notified to clients.

The most recent research also included 150 ‘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 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 2020.

Recent research by Metropolis concluded that a conservative estimate of ‘live’ business 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 Simon at simon@metroinfo.co.uk

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Cityoffices.net, the sister property leads service to Metropolis, is about to publish its ‘Autumn 2017’ survey on the office construction market in central London, with details of new schemes starting, the dozens of schemes at preparation stage and 200 office schemes in the pipeline for construction starts in 2017-2020.

For more information on Cityoffices, email Andy at andy@metroinfo.co.uk

Office Relocations Planned in August

Metropolis ran 645 business leads on ‘office movers’ in the month of August 2017. If all reported moves were added together the total would exceed 17 million sq ft of office searches and transactions, researched by Metropolis’ unique market led intelligence research team. London was the largest region with 284 leads during month, but there were also strong showings from the South East (62), North West (62), Yorkshire (49) and Scotland (42). IT services, professional and financial were the largest business sectors planning relocations or agreeing moves during the month.

The business leads covered the whole UK and provided details of the size of the office occupier, its 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 580 July leads, included those on Deutsche Bank, EBRD, Medicines and Healthcare Agency and TK Maxx.

The August 2017 leads included 214 ‘identified requirements’. Which means that the company confirmed to researchers that it has current or future plans to search for alternative office space. Of these 214 searches, 130 were new office searches, not previously notified to clients.

The most recent research also included 161 ‘potential movers’ which were mainly longer-term leads on occupiers, considering a relocation, but have yet to make a final decision on whether to search.

Most of the remaining stories covered companies that have 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 2020.

If you would like some information on flexible Metropolis subscription packages, then please email Simon at simon@metroinfo.co.uk

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Cityoffices.net, the sister property leads service to Metropolis, saw a further 25 stories posted in August, covering new development opportunities planning applications, consents, construction starts and development teams in London and major cities. The database now covers over 200 office schemes in the pipeline for construction starts in 2017-2020.

For more information on Cityoffices, email Andy at andy@metroinfo.co.uk

Patchy Leeds Demand

Demand for office space in Leeds for the first half of 2017 remains similar to the 12 months that preceded it, but trailed the five year average by 18 per cent, according to new research.

The CBRE Leeds office marketview report found that office take-up in the city was 237,165 sq ft in the first six months of 2017.

There were three lettings over 20,000 sq ft; a 46,058 sq ft letting to Burberry at 6 Queen Street, 25,968 sq ft to Willis Towers Watson at 5 Wellington Place and 22,441 sq ft to BW Legal at 1 Apex View.

The majority of take-up in the city was in the sub 5,000 sq ft size band.

Despite the lower level of enquiries in all size ranges, annual take-up is still likely to be a record for Leeds city centre if the pre-let of 350,000 – 380,000 sq ft at Wellington Place to the Government Property Unit goes ahead.

Looking to the second half of the year, demand is expected to be patchy for at least another quarter.

Metropolis has run nearly 40 new requirements for Leeds office space this year, however most searches are small.

3 Wellington Place (109,000 sq ft) is the only new development completing within the next 12 months. Refurbishments available this year, include ‘Platform’ (120,000 sq ft) and 7 Park Row (40,000 sq ft),
which will help the dwindling Grade A market.