Media Sector and the London Office Market

The recent signing of a large pre-let of 124,000 sq ft of new London HQ offices by Sony at 4 Handyside Street, Kings Cross has brought renewed focus onto the contribution of the media sector to London’s office market. Metropolis looks at the importance of the media sector to office transactions and relocation moves in London.

In 2018, the technology and media sector once again dominated the London’s leasing profile, accounting for 27% of take-up across central London at around 3m sq ft and signing two of the year’s three largest deals. This is the third consecutive year that the sector has finished the year in the top spot. In many respects, the media and tech sector has been the standard bearer for London’s continued global magnetism

Kings Cross has become a popular destination for the creative and media sector with recent moves agreed with Universal and PRS for Music. In addition, Google and Facebook, which straddle the line between media and technology companies, also chose Kings Cross as their London HQ destinations.

Other large media sector moves announced recently, have included WPP agreeing to centralise HQ functions at 1 Southwark Bridge Road, SE1 and McCann Worldgroup pre-letting nearly 150,000 sq ft at the under construction 135 Bishopsgate, EC2.

Metropolis has also recently run large London moves planned by Publicis, Datamonitor, Ree, Macmillan Publishers and Trade Desk.

Media occupiers have been active across all sub-markets, but they have been particularly dominant in the West End, accounting for over 30% of all activity in 2018. In Midtown, Herbal House, EC1 and The Farmiloe, EC1 attracted a variety of media and creative tenants. Research by Colliers shows that media sector tenants negotiate the shortest lease lengths and therefore the sector is the most likely to be looking for its next move.

Looking ahead, there are 220 London based media companies approaching lease expiries in the next two years. Metropolis is tracking over 130 which have expressed an interest in a move. Future large identified requirements include: 20th Century Fox (80,000 – 100,000 sq ft) and The Telegraph Media Group (70,000 – 80,000 sq ft).

For further analysis and details contact Paul Ives at Metropolis

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London Office Market – November 2018

Central London office lettings in November 2018 reached just over 1m sq ft from 57 mid-large size office transactions (5,000 sq ft+) during the month. The November 2018 figure is in line with the current monthly London average of 1m sq ft.

November was characterised by 16 office deals over 20,000 sq ft, which were led by the Deloitte Digital’s 99,000 sq ft deal at Shoe Place, EC4 along with large deals to Starlizard in Camden; THB Group’s pre-let at 22 Bishopsgate, EC3 plus Axis Speciality and National Australia Bank at ‘The Scalpel’.

IT services topped the table of lettings by sector, compiled by Metropolis, underpinned by the Deloitte deal. This was followed by business services led by lettings to Knotel, ETC Venues and Wework. Insurance, professional and business services were also well represented. Office deals ‘under offer’ in central London remained at 3.7m 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 48pc of the office floorspace let in November 2018 at 480,000 sq ft. The West End saw 200,000 sq ft of take-up. Midtown contributed 150,000 sq ft of lettings and Docklands 40,000 sq ft. Current London office demand is calculated to be around 3.8m sq ft in the City and 3.3m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month, reached a healthy 460,000 sq ft sq ft (46% 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 635 ‘live’ London office requirements, with pending deals for space of up to 1.5m sq ft due to sign in the next few months.

Cityoffices is close to completing on its autumn ‘Skyline Survey’ Report in London. Details on Metropolis database from Paul Ives at paul@metroinfo.co.uk

Metropolis Leads in May 2018

Metropolis ran 557 business leads on ‘office movers’ in May 2018. 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 245 business leads during month, but there were also strong showings from the South East (71),  North West (45), Yorkshire (39) and Scotland (37) . Business services and financials services were the largest business sectors planning relocations or agreeing moves during the month.

The relocation 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 557 May leads, included those on occupiers Chinese embassy, Barclays Bank, Telehouse, Societe Generale and Publicis.

The May 2018 leads included 154 ‘identified requirements’, including 83 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 154 searches, 110 were newly posted office searches, not previously notified to clients.

The most recent research also included 166 ‘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 Andy at andy@metroinfo.co.uk

Plans for 2018

Happy New Year to all Metropolis Blog readers.

We plan to bring all subscribers another 6000+ business leads on companies searching for offices, requesting tenders and agreeing office moves in 2018. Far greater, better informed and deeper coverage than any other provider. All leads include details of contacts, timescales and company intentions. Subscriptions for nearly every budget.

For subscription details email simon@metroinfo.co.uk

Metropolis Office Movers in November 2017

Metropolis ran 640 business leads on ‘office movers’ in the month of November 2017. If all reported moves were added together the total would exceed 12 million sq ft of office searches and transactions, researched by Metropolis’ unique market led intelligence research team. London was the largest region with 288 leads during month, but there were also strong showings from the South East (64), North West (63) and Scotland (39). Business services, IT and financial 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 640 November leads, included those on Facebook, Channel 4, WeWork, Bupa and Lloyds.

The November 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, 124 were new office searches, not previously notified to clients.

The most recent research also included 149 ‘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 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, has published 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

Central London Lettings and Pre-lets – October 2017

Central London office lettings in October 2017 reached a healthy 1.3m sq ft of deals from 60 mid-large size transactions (5,000 sq ft+) during the month. The October figure exceeds the current monthly average of just under 1m sq ft .

October was characterised by 14 office deals over 20,000 sq ft, which included Dentsu Aegis’ 310,000 sq ft pre-let at 1 Triton Square, NW1, Sidley & Austin’s 120,000 sq ft pre-let at 70 St Mary Axe, EC3; WeWork took 107,000 sq ft at One Poultry, EC3, and Red Bull took 37,000 sq ft at Seven Dials, WC2.

Media topped the table of lettings by sector, underpinned by the Dentsu Aegis deal. This was followed by professional services with the large deals involving Sidley Austin and Grant Thornton.  Business services also performed well, helped by the lettings to WeWork and Orega. Office deals ‘under offer’ in central London fell slightly to 3.5m sq ft and pending deal volumes are healthy in nearly all sub-markets.

By area, the City accounted for 32pc of the office floorspace let in October at 414,000 sq ft. The West End saw 553,000 sq ft of take-up, underpinned by Dentsu Aegis. Midtown contributed 147,000 sq ft of lettings. Current London office demand is calculated to be around 3.2m sq ft in the City and 2.9m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 718,000 sq ft (55% of the monthly total), as transactions for new space resumed their recent strong showing.

Metropolis research is currently monitoring 630 ‘live’ London requirements, with deals for space of up to 1.8m sq ft due to sign in the next few months.

Cityoffices and Metropolis  has produced its latest London Skyline report for Q4 2017. The report contains details of new office schemes under construction, demolitions underway and projections for future construction. Further details of planning applications and consents, with scheme by scheme detail are listed on the Cityoffices.net website. Details on the report and Cityoffices from Andy King at andy@metroinfo.co.uk

Aberdeen, Edinburgh and Glasgow Offices

A recent report from Savills on the Scottish office market, saw lettings reach 1.4m sq ft for the first half of 2017, 20% above the five year half year average.

Savills say that the Aberdeen office market has seen increased letting activity in recent months driven by the increased oil price. Take up during the first half of 2017 reached 238,000 sq ft, exceeding the 2016 full year level. 78% of take up was accounted for by the engineering, oil and utilities sector, up from 17% last year.  Nonetheless there remains ample supply of office space in the Aberdeen market, which has fallen just 3% from end 2016 to stand at 2 million sq ft. Office schemes at the Silver Fin building and Marischal Square are both expected to complete during the second half of 2017, providing 287,000 sq ft of additional speculative offices.

Edinburgh saw the strongest quarter of take up on record during the second quarter of 2017, according to Savills, pushing the half year total to 772,000 sq ft, which was 50% above the five year first half average.
Total city centre take up at half year reached 541,000 sq ft. This was largely driven by the GPU (Government Property Unit) signing a pre-let on 180,000 sq ft of space at New Waverley. Other large scale deals included Computershare signing a pre-let for 41,000 sq ft of space to be refurbished in Four North and Burness Paull regearing on 27,000 sq ft at 50 Lothian Road. Other deals in the out of town market included Standard Life signing for 31,000 sq ft at South Gyle Broadway. Grade A available office space remains scarce in Edinburgh, with only 313,000 sq ft of space remaining,

Glasgow saw office lettings reach 434,000 sq ft across the city centre and out of town markets during the first half of 2017, in line with the five year first half average. The largest deal was the Student Loans Company’s 41,000 sq ft letting of Europa House. Despite modest take up figures for the city centre market, the out of town market saw a number of engineering companies take space, which has accounted for 25% of the wider market take up this year.With a number of large deals under offer in the city centre, such as DWP, take up in Glasgow looks set to reach Savills forecast of 600,000 sq ft for the full year.

Metropolis has published 60 business leads on Aberdeen, Edinburgh and Glasgow occupiers with requirements, looking for office space over the last six months. It is also reporting on nearly 100 office tenants that are ‘potential movers’ as they approach decisions on whether to renew leases or relocate in 2018 and 2019.