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Metropolis Office Requirements – Q1 2015

April 10, 2015 Leave a comment

9.6m sq ft of demand

The Metropolis team researched over 455 UK company office requirements in Q1 2015, representing 9.6m sq ft of office demand.

5.5m sq ft of this demand was for space in Greater London, 4.3m sq ft of which was demand for central London space. 4.1m sq ft of demand was identified by our team in the rest of the UK.

Demand for City of London space continued to be strong during Q1, with 2.1m sq ft required in over 91 planned office relocations. Four of the top five requirements by size were searches by banks with the other a significant requirement from a major accountancy firm. The top five requirements were moves planned in 2016, 2017 and 2018. EC2 demand made up 42% of the total central London space required.

0.8m sq ft of demand was identified in the West End of London, 0.5m sq ft in London SW1 and 0.3m sq ft in London W1. Two of the top five requirements by size were searches by banking and finance companies. All of the top five largest moves are planned for late 2015 and 2016.

Mid Town office demand was mainly focused on London WC2, with two of the largest requirements centered on this postcode. One of the most significant requirements identified was an 80,000 sq ft HQ search by a TMT company planning a move in 2017.

In London SE1, where 0.3m sq ft of demand was researched, the largest requirement came from a construction group. In E14, a 400,000 sq ft requirement from an investment bank made up 66% of the 0.6m sq ft of total demand for offices in the area.

Banking & Finance sector UK office demand reached 2m sq ft in Q1 2015. The largest searches centered on the City of London and Docklands, although there was a notable search for 175,000 sq ft of space in central Birmingham.

0.8m sq ft of demand was identified from the Technology & Telecoms sector, and similar to banking and finance was largely focused on the City of London. There were however also significant searches for space in Manchester and Newcastle-upon-Tyne.

The largest government requirements were for space outside of central London, the most significant a search for over 400,000 sq ft in Manchester. The largest media sector requirements centered on fringe central London locations and the top three law sector requirements were for space in Birmingham, Manchester and Bristol.

Metropolis is currently tracking over 700 unique searches for space in London and over 400 in the rest of the UK.

Metropolis Office Requirements – Q3 2014

October 30, 2014 Leave a comment

9.5m sq ft of demand

Our team here at Metropolis researched over 370 UK company office requirements in Q3 2014, representing 9.5m sq ft of office demand.

6m sq ft of this demand was for space in Greater London and 4.9m sq ft was demand for space in central London.

Demand for City of London space continued to be strong during Q3, with 2.4m sq ft required in over 60 planned relocations. Three of the top five largest requirements in the City were searches by technology and media companies. EC2 demand made up 37.5% of the total space required.

1.4m sq ft of demand was identified in the West End of London, split equally between requirements for space in London SW1 and W1. Again three of the top five largest requirements were searches by technology and media companies, with two significant searches by financial service sector companies identified.

Mid Town office demand was largely focused on London WC2, with 100,000 sq ft of the 300,000 sq ft required in this postcode attributed to media sector requirements.

Just over 0.6m sq ft of demand was researched in London’s Southbank, 200,000 sq ft of which was triggered by an energy company’s requirement for additional space in the area.

Similar to H1 results, the Banking & Finance sector is leading the demand for new UK offices, with 1.4m sq ft of requirements in the UK, just over 0.4m sq ft of which is sought in the City of London.

Requirements from media sector companies represented just over 1m sq ft of demand, a 300,000 sq ft requirement in London W1 significantly boosting this figure. Technology & Telecom sector requirements came a close third with 0.9m sq ft of demand. The law sector accounted for 0.8m sq ft of demand and the insurance sector 0.5m sq ft.

Simon Sluszny October 2014

Filed under Metropolis Market Reports Tagged with 2013, 2014, Business, business information, business leads, CBRE Group, Central London, City, City of London, Cityoffices.net, commercial property, corporate relocation, Docklands, London, London offices, Metropolis, metropolis property research, office construction, office demand, office lettings, office market, office moves, office refurbishment, office relocation, office requirements, office search, office space, offices, Private sector, refurbishment, relocation, relocation leads, requirements, searches, space demand, sq ft, Square foot, take-up, Thames Valley, TMT, WorldPay

Hedge Your Bets

September 20, 2013 Leave a comment

There has been some discussion of renewed property activity in the London hedge fund and private equity sector recently. Metropolis undertook a mini-analysis of the sector over the last two years using its database and found that activity has been even higher than that reported by other commentators.

Some 80 firms have been featured by Metropolis since early 2012. Last year nearly 140,000 sq ft was let to hedge funds and private equity firms (including the largest deal 30,000 sq ft to Winton Capital), followed by another 100,000 sq ft so far in 2013 including 25,000 sq ft to Bridgepoint Capital.

There are currently over 210,000 sq ft of unfulfilled office requirements in the market, spread amongst 25 firms, mainly searching in the London Mayfair and St James’s areas.

In addition, Metropolis is in contact with a further thirty firms with approaching lease expiries over the next two years that could yield another 190,000 sq ft of requirements.

These, often secretive, firms are well known for paying high rents and spending considerable sums on fit-out specification, however market intelligence on future plans is known for its scarcity. With further activity from US firms spreading into Europe the hedge fund and private equity sector looks well set for more growth.

REF: V35DJP2Q7ADM

Filed under Market Comment Tagged with Bird & Bird, Bridgepoint Capital, Business, Central London, City of London, commercial property, DLA Piper, Investing, London, London offices, Metropolis, office construction, office moves, office refurbishment, office relocation, office requirements, office space, Private equity, Private equity firm, Private sector, Saatchi & Saatchi, Square foot, Thames Valley, TMT, WorldPay

City drives office demand

September 20, 2013 Leave a comment

Metropolis Office Requirements – First Half of 2013

The Metropolis team researched 3,252 UK relocation, refurbishment and construction leads in the first half of 2013. 852 of the total leads researched were active searches by businesses for new office space, representing over 20m sq ft of demand.

In terms of private sector office demand by region, the significant proportion originated unsurprisingly from central London companies, particularly those in the City of London. Metropolis researched in excess of 150 City of London office requirements in the first half of 2013, representing over 4m sq ft of demand. Almost 2m sq ft of demand was uncovered in the West End and over 1m sq ft in Mid Town.

Thames Valley requirements counted for over half of the private sector office demand researched in the South East (1.5m sq ft). Several new Thames Valley requirements emerged from the TMT sector (Technology, Media, Telecoms) and there were also significant new requirements from biotechnology, pharmaceutical and insurance companies.

The North West region is showing further signs of increasing activity, with the majority of office requirements centered on Greater Manchester (61%). Some of the larger office searches in this area have come from law firms, accountants and banks.

The TMT sector made up 21% of the total UK office demand uncovered by Metropolis research (4.2m sq ft). The banking & finance and law sectors continue to produce strong demand for office space and this demand is expected to grow if recent reports on the bounce-back of the services industry are to be believed.

We have also seen strong interest in new office space from the insurance sector. Three of the top five requirements by size from this sector are centered on the City of London, with one insurer looking for over 100,000 sq ft in Glasgow as well as in London EC2.

Four of the top five office requirements in the accountancy sector are for space in London. However there are also several firms in this sector with requirements for over 30,000 sq ft in Manchester, Leeds, Bristol, Reading and Edinburgh.

Looking forward, we expect to see a similar sector picture in the second half of 2013, with a number of new requirements for high quality space likely to emerge due to improving economic conditions. The London office market looks well positioned to satisfy much of this demand, with grade A lettings predicted by many to return to the peaks last seen in 2009-2010.

Notable London occupiers currently considering options include Omnicom (300,000 sq ft), M&G Investments (250,000 sq ft) and DLA Piper (200,000 sq ft).

Filed under Metropolis Market Reports Tagged with Bird & Bird, Central London, City of London, commercial property, DLA Piper, London, London offices, Metropolis, office construction, office moves, office refurbishment, office relocation, office requirements, office space, Private sector, Saatchi & Saatchi, Square foot, Thames Valley, TMT, WorldPay

Demand Surge

September 20, 2013 Leave a comment

Central London Office Space (July 2013, abridged)

Demand for Central London office space is looking up. In the first half of the year office take-up reached over 900,000 sq ft. Recent well publicised deals involving Amazon, WorldPay, Saatchi & Saatchi and Bird & Bird look likely to push office take-up in the second quarter to in excess of 2.6m sq ft.

After Q1 transactions also topped 2.6m sq ft, London office demand has made a record start to the year, 15% up on the 10 year lettings average, with the best start to the year since 2008, as the graph below shows:

There is over 2m sq ft ‘under offer’ in central London, which will form the backbone of Q3 take-up. The reasons for the upsurge in demand in London include a bulge of lease expiries in the 2014-16 period, an upturn in the fortunes of the financial services sector in London and a rapidly widening choice of new office space available for letting.

Financial services is currently taking around 10% of central London take-up, compared to only 6.5% in the same quarter in 2012. While some of this demand is coming from banks, mainly overseas owned merchant banks, the majority of financial services sector demand is being driven by derivatives traders, private equity advisers, transaction groups and fund managers.

There are 86 office schemes under construction at the moment in the main London office districts with 8.5m sq ft of office space available for letting. In addition, a further 21 schemes have completed since late 2012, offering more than another 1m sq ft for letting. Agents estimate that over 80% of office space available in central London is grade A.

London take-up figures are starting to reflect the amount of new office space on the market, with 1.3m sq ft of new, or newly refurbished grade A space let in Q2 2013, compared with less than 500,000 sq ft of grade A lettings in the second quarter of 2012. The forecast is that grade A lettings could return to the peaks last seen in 2009-10

Meanwhile, prime office rents are only 1% above the level of a year ago, with low rental growth particularly apparent in the City of London, which is further encouraging companies approaching lease expiries to consider moving to new buildings.

In terms of future demand, Metropolis is currently tracking just over 600 medium and large central London office requirements in the market, equivalent to 12m sq ft of demand.

In addition, there is a similar number of instances where companies are approaching lease expiries in the next two years and have not yet decided whether to move or renew. Deals which result from these decisions could result in a further 18m sq ft of transactions over the next two years.

The current increased level of take-up means that there is a real prospect that office lettings in central London in 2013 could top 10m sq ft for the first time since 2010.

Filed under Metropolis Market Reports Tagged with Bird & Bird, Central London, City of London, commercial property, London, London offices, office construction, office moves, office refurbishment, office relocation, office requirements, office space, Saatchi & Saatchi, Square foot, WorldPay

Metropolis – www.metropolisleads.com

Metropolis Office Requirements – Q1 2015

Metropolis Office Requirements – Q3 2014

Hedge Your Bets

City drives office demand

Demand Surge

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