Metropolis Office Mover Leads in June 2018

Metropolis ran 562 business leads on ‘office movers’ in June 2018. If all reported moves were added together the total would exceed 14 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 240 business leads during month, but there were also strong showings from the South East (60),  Scotland (51) North West (43) and Yorkshire (35) . 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 562 June leads, included those on occupiers Amazon, British Airways, Barclays, Scottish Office and WeWork.

The June 2018 leads included 171 ‘identified requirements’, including 84 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 171 searches, 100 were newly posted office searches, not previously notified to clients.

The most recent research also included 160 ‘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, mentioning ‘Metropolis Blog’

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Metropolis Law Sector Report 2018

Initial findings from the 2018 Metropolis report on office relocation in the UK Law sector revealed that 360 legal sector firms were involved in office property decisions in the year to end 2018.

The survey also found that over 7m sq ft of office space was transacted or required by occupiers searching for alternative space over the last year by law sector firms.

The report found over 120 firms searching for space that were interviewed by Metropolis researchers. Over a half of requirements were prompted by upcoming lease expiries, backed by expansions, mergers and restructuring.

The biggest law sector office deals in London involved leases signed for HQ relocations by Freshfields, DLA Piper, Sidley Austin and Minster Law.

Outside of London, Clyde & Co had the biggest office transaction, with a deal to occupy 69,000 sq ft in the Royal Exchange, Manchester. Simmons & Simmons signed a 12-year lease to occupy the top two floors (27,000 sq ft) of the Aurora building in Finzels Reach, Bristol, from January. Hogan Lovells will take over the eighth floor (23,388 sq ft) of The Colmore Building in Birmingham’s business district, where it currently occupies 7,620 sq ft on the tenth floor.

Leeds will house a relocation by Walker Morris, which announced that its 500 staff, who are currently split across two buildings in King Street, will relocate to a flagship office in 33 Wellington Street next summer. The building, in the city’s business district, is currently undergoing a comprehensive £10m refurbishment.

In a sign of things to come, Knight Frank points out that magic circle firm Allen & Overy has developed its Fuse incubator in its London headquarters while Mishcon De Reya has created MDR Lab – its programme for tech start-ups in the legal sphere – in its London office.

London Office Market Analysis

Estates Gazette has just published in analysis of the London office market in 2017. The main conclusions include:

 

  • Total central London office take up was 12.6m sq ft (all deals) which was up around 2m sq ft on the 2016 total in a relatively strong year and just above the five year average;

 

  • The City core saw just under 3.6m sq ft of deals in 2017, together with 1.8m sq ft in the City fringe. Both figures are down on previous years;

 

  • Lettings in the Midtown, West End and Southbank areas were strongly up by over 40% last year;

 

  • Lettings of Grade A space were up strongly at 52% of all lettings in 2017, compared to 42% in 2016;

 

  • Overall, TMT was the most active sector in 2017 as a whole, accounting for more than 27% of all lettings. The five biggest deals in the quarter were from the TMT, Central and Local Government, Property, and Financial sectors. A proportion of small and medium sized occupiers are being absorbed by serviced office space;

 

  • Some 3.7m sq ft of new office space was started in 2017, but this compares with an average of over 5m sq ft of starts in 2015 and 2016. This means there are lots of speculative completions coming through, which in turn in driving higher take-up;

 

  • Around 8.3m sq ft of new London office completions are planned for 2018 (a ten year high), with over 6.3m sq ft of completions already planned for 2019;

 

  • Overall London office availability has risen from 4.3% in 2015 to 7.4% in late 2017, driven by a rise in secondhand space that now stands at 12.4m sq ft;

 

  • As a result rents overall are edging down, which could encourage more occupiers to relocate;

 

  • 2018 take-up in central London is likely to be driven by new build deals;

 

Metropolis forecasts that the rising volume and proportion of new build letting transactions will sustain the fit-out and office equipment supply markets in 2018-19.

Cityoffices.net forecasts a strong pipeline of new schemes (there are over 200 in the pipeline of 20,000 sq ft or more) seeing construction starts in 2018.

200 Movers in Manchester

A recent report from the Manchester Office Agents Forum (MOAF) revealed a total of 1.208m sq ft of office lettings across 271 transactions in 2017, well above the 10-year average.

Metropolis ran over 330 business leads on Manchester office moves in 2017, which if all added together would total over 10m sq ft.

MOAF said strong demand for prime offices has left the market with a record low supply of Grade A office space.

The main schemes with available space are 101 Embankment, No 1 Spinningfields, 3 Hardman Square, 40 Spring Gardens and 2 St Peter’s Square, which is likely to trigger some short-term refurbishment projects

There are a number of Grade A schemes under construction to include Landmark (180,000 sq ft), 125 Deansgate (126,000 sq ft), Hanover, NOMA (90,000 sq ft), Circle Square (230,000 sq ft) and 11 York Street (80,000 sq ft), the majority of which will be delivered in mid-late 2019.

Key office lettings in 2017 included: 55,802 sq ft to We Work at No1 Spinningfields and 44,000 sq ft at One St Peters Square, 77,449 sq ft to DWP at 2 St Peters Square and Clyde & Co taking 69,000 sq ft at Manchester Royal Exchange.

Metropolis research also relayed early warning news of large Manchester moves by companies including Barclays Bank, Distelrec, Bupa, Callcare, Virgin Media and The Hut.

Forthcoming Manchester moves tipped by Metropolis for 2018 or beyond total just over 200.

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

4000 office moves for 2018-19

Metropolis has broken new records after 7,200 office business leads were published in 2017. If all the office space contained within those leads were added together the total would top 200 million sq ft.

Covering office deals agreed, companies searching for space, those with potential requirements and a small number of key speculative schemes, the 7,200 leads covered the whole UK from the tip of Cornwall to the north of Scotland. Office sizes ranged from 1,500 sq ft for 10 staff to Google’s new 800,000 sq ft London HQ.

Key points:

  • 2,700 company office moves confirmed to have completed in 2017;

 

  • 3,200 office moves are planned for 2018 and 890 office moves already planned in 2019 or later;

 

  • 3,000 companies, including 1,300 with ‘identified requirements’ expect to be making property decisions in 2018 and 2019;

 

IT and media services is the largest sector (800 leads) followed by financial services (600 leads) and professional, including large numbers of accountants and law firms (450 leads). Although the leads are spread over all UK regions, the size of the London office market, means that over 40% of the leads feature relocations, both scheduled and planned in central London. All leads include contact names, telephone numbers and 75% have email addresses, many of which are specific to the decision maker.

Metropolis remains the largest specialist provider of market intelligence led, office market business leads.

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 or to discuss a trial, then please email Simon at simon@metroinfo.co.uk

 

Central London office lettings in November 2017

Central London office lettings in November 2017 reached a healthy 1m sq ft of deals from 40 mid-large size transactions (5,000 sq ft+) during the month. The November figure matches the current monthly average of 1m sq ft .

October was characterised by 17 office deals over 20,000 sq ft, which included Lloyd Bank’s 117,000 sq ft letting at 125 London Wall, EC2, Hyperion’s 115,000 sq ft letting at Creechurch Place, EC3; WeWork took 90,000 sq ft at 131 Finsbury Pavement, EC2 and GAM took 42,000 sq ft at 8 Finsbury Circus, EC2.

Business Services topped the table of lettings by sector, underpinned byWeWork deals. This was followed by financial services with the large deals involving Lloyds Bank, GAM and Blue Crest.  Insurance and Media also performed well, helped by the lettings to Hyperion and Moonpig. Office deals ‘under offer’ in central London fell slightly to 3.4m sq ft and pending deal volumes are healthy in nearly all sub-markets.

By area, the City accounted for 57pc of the office floorspace let in November at 563,000 sq ft. The West End saw 235,000 sq ft of take-up, underpinned by WeWork. Midtown contributed 132,000 sq ft of lettings, although there were no significant Docklands deals. Current London office demand is calculated to be around 3.1m sq ft in the City and 2.8m sq ft in the West End.

The volume of grade A (newly built or refurbished office space) let during the month reached 661,000 sq ft (66% of the monthly total), as transactions for new space resumed their recent strong showing.

Metropolis research is currently monitoring 635 ‘live’ London requirements, with deals for space of up to 1.9m 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 the Cityoffices database from Andy King at andy@metroinfo.co.uk

New Lease Research from Metropolis

The London office market has maintained steady office letting take-up during 2017. The latest figures calculated by Metropolis to the end of Q3 2017 reveal office transactions totaling 8.8m sq ft for the first nine months of the year (deals 5,000 sq ft and above). Based on these figures and a number of large office moves under offer, 12m sq ft take up by the end of the year is not out of the question. If 12m sq ft is achieved this would surpass the 11m sq ft of 2016 and match the total for 2015.

The table below breaks down take-up in London in 2017 by the five largest sectors

Sector                             % of take-up
Financial                          20%
Business Services           19%
IT/Computer                   15%
Professional                     12%
Media                                11%

Financial services leads the way, boosted by the large pre-let in the City to Deutsche Bank. Business services comes a close second helped by over 900,000 sq ft of lettings to serviced office operator WeWork. IT has been driven by large expansions by Expedia, Amazon and Spotify. By area, the City has taken around 40% of take-up, with West End, Midtown and Southbank broadly taking 15% each. Docklands has had  a very quiet 2017.

Metropolis has recorded 96 deals for London office space of 20,000 sq ft or more in so far 2017 amounting to 5m sq ft. Business services, underpinned by WeWork deals, takes over 1.2m sq ft of that, followed by 880,000 sq ft of financial sector driven by Deutsche Bank, 600,000 sq ft of IT industry deals and nearly 500,000 sq ft from professional companies (law firms, accountants, consultants). a further 2m sq ft of deals are ‘under offer’ and close to signing in Q4 2017.

Recently some office market analysts have advanced the view that the London office market for moves under 20,000 sq ft is ‘patchy’. So Metropolis went back to all the potential office occupiers contacted in 2016, approaching 2017 lease expiries, to trace what happened next.

Taking a sample from the 700 London-based occupiers contacted during 2016, Metropolis found that, despite the fact that many were simultaneously negotiating with the landlord of the existing office, over 70% of occupiers decided to move, prior to the upcoming lease expiry. The sector with the strongest propensity to move was media and the least likely to move was business services. The larger a company, the slightly higher propensity to move. West End companies were slightly more likely to move than City-based ones.

The last nine months has seen a strong pace of office space pre-lets set by incoming tenants in advance of construction completion. In total, some 4.3m sq ft of London office space, that is currently under construction, has been pre-let. Some of the high profile recent pre-lets included Boston Consulting, Metro Bank taking 67,000 sq ft of offices at 20 Old Bailey, EC4; Boston Consulting and Arup at 80 Charlotte Street, W1; HSBC taking 30,000 at Cork Street, W1 and Kings College at Roman Wall House, EC3.

The most common trigger for pre-let relocation is expansion. Nearly 50% of the space completed over the previous 6 months has now been let and includes big lettings to likes of Universal Music, Cancer Research, XTX Markets, British Council, Cleary Gottlieb, Schroders and Moneysupermarket.

Looking ahead, our research with thousands of London office tenants suggests a robust level of take-up in Q4 2017, although the increasing attractions of serviced office space and Brexit uncertainty could have an impact in the medium term.