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Central London Office Market Report Recovery in City take-up Q4 2016

Central London Office Market Report - · PDF file2 | Central London Office Market Report Q4 2016 Central London overview Ben Burston Head of UK Office Research ... London Capital Markets

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Central London Office Market ReportRecovery in City take-up Q4 2016

2 | Central London Office Market Report Q4 2016

Central London overview

Ben Burston Head of UK Office Research

Solid growth momentum despite political uncertaintyA further strengthening of economic indicators, coupled with confirmation of a robust GDP growth in Q3 and Q4, has reassured corporates and investors, lending an air of cautious optimism to the Central London office market as 2017 commences. A rise in the services sector PMI to 56.2, along with strong business activity in London in particular and solid labour market data, indicate that the economy carries significant momentum as the UK prepares to commence negotiations on its exit from the European Union.

Prime Minister Theresa May has now confirmed that Britain will not seek to remain a member of the single market, but rather will negotiate a comprehensive free trade agreement including substantial market access for financial services. The negotiations will garner significant attention as the year goes on but the precise outcome is unlikely to be known before 2018.

High take-up in Q4Take-up volumes rebounded in the final quarter, reaching 3.2 million sq ft, the strongest quarter of the year, following a subdued Q2 and Q3. The strong final quarter propelled full year take-up to 10.1 million sq ft, which represents a slowing on the exceptional 2015 figure, but is in line with the ten year average of 10.2 million sq ft. While occupiers have been more cautious post-referendum and sought additional flexibility from landlords, the year-end surge clearly indicates that political uncertainty has not caused them to abandon requirements.

The City and East London markets performed particularly well, with activity in the City including major pre-lets to Barings and Fidelity International, while the Government Property Unit’s acquisition of 524,000 sq ft in Canary Wharf, the largest deal of the year, boosted the East London total.

Supply low but is set to rise in H1 2017Supply remained broadly unchanged in Q4 at 9.5 million sq ft, reflecting an overall vacancy rate of 4.2% across Central London. Vacancy is likely to rise in H1 2017 due to a high level of upcoming development completions in both the City and West End markets. The level of speculative development under construction rose to 9.6 million sq ft, largely due to the commencement of 22 Bishopsgate, EC2.

Rents at the top end of the market remain under pressure

Prime rents in Mayfair and St James’s dropped for the second consecutive quarter to £110 per sq ft, marking an 8% annual decline. This premium end of the market has been impacted by more subdued demand in the aftermath of the referendum. City prime rents remain unchanged at £70 per sq ft, however there is pressure on incentives, with rent free periods moving out by a further three months in Q4.

Reduced liquidity but overseas demand for London remains strong

Central London investment market turnover totalled £4.3 billion in Q4, more than double the £2.0 billion seen in Q3, bringing total 2016 volumes to £12.9 billion. While this marks a significant decline from three consecutive years in excess of £18 billion, there remains strong interest from international investors and the best lots continue to attract multiple competitive bids.

Private investors continue to be very active and have played a key role in supporting pricing, stepping in while institutional investors have been more cautious in H2. Reflecting this, prime yields have remained stable in Q4, with City yields at 4.25% and West End at 3.5%.

Central London Office Market Report Q4 2016 | 3

Take-up

Millio

ns sq

ft 4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

City West End Docklands/East London

Q4 ‘11 Q1 ‘12 Q2 ‘12 Q3 ‘12 Q4 ‘12 Q1 ‘13 Q2 ‘13 Q3 ‘13 Q4 ‘13 Q1 ‘14 Q2 ‘14 Q3 ‘14 Q4 ‘14 Q1 ‘15 Q1 ‘16Q2 ‘15 Q3 ‘15 Q4 ‘15 Q2 ‘16 Q3 ‘16 Q4 ‘16

2016 total take-up

10.1 million sq ft

in line with long term average

Vacancy rates Prime rents

Prime yields

Investment volumes

26% 74%UK investors Overseas investors

(2016)(2016)

0

2

4

6

8

10

12

14

16

18

20

£ billio

ns

2006 2007 2008 2009 2010 2011 2012 2013 2014 2016

Investment turnover

2015

3%

4%

5%

6%

7%West End prime yieldCity prime yield

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

0.03

0.04

0.05

0.06

0.07

CITy

4.0%WEST END

4.1%EAST LONDON

5.2%

2016-2019

City

Q4 2015 - Q4 2016 (million sq ft)

4.5 5.6

City

Q4 2015 - Q4 2016 (per sq ft)

£70 £70West End

Q4 2015 - Q4 2016 (per sq ft)

£120 £110

West End

Q4 2015 - Q4 2016 (million sq ft)

3.2 3.2

Speculative development under construction

4 | Central London Office Market Report Q4 2016

Key transactions

The Post Building, WC1Tenant: McKinsey & CompanySize: 99,000 sq ft

Andrew BarnesDirectorTenant Representation

The Tower, The Bower, EC1Tenant: WeWork Size: 59,000 sq ft Dan BurnDirectorLondon Agency

The Peak, 5 Wilton Road, SW1Price: £145 millionPurchaser: Al Gurg GroupTim GrahamDirector London Capital Markets

20 Moorgate, EC2 Price: £155 million Vendor: Deutsche Fonds Holding AG

Andrew HawkinsDirectorLondon Capital Markets

“Whilst some tenants are delaying decisions in the short term due to Brexit uncertainties, others are making long term investments by upgrading their workplace. The deal at The Post Building is a great example of a tenant ensuring their staff have a high quality working environment to achieve optimum productivity. Their new location will also provide excellent transportation links given the imminent opening of the Elizabeth line.”

“On behalf of Helical, JLL pre-let 59,000 sq ft to WeWork on levels 1-6 of The Tower building, reflecting a third of the 2nd phase of the Bower which will be delivered in 2018. The Tower sits adjacent to the completed first phase of the Bower comprising 140,000 sq ft which was pre-let in its entirety to a range of tenants including CBS, Stripe, Farfetch, Allegis, Pivotal and John Brown Media as well as a range of high quality food and beverage operators. WeWork’s concept of shared working will complement the new community Helical have created at The Bower.”

“The freehold interest of The Peak, Victoria has been sold by JLL on behalf of TH Real Estate and the Cityhold Office Partnership. The sale price achieved a record breaking capital value in Victoria of £1,490 per sq ft, and a net initial yield of 4.27%, reflecting the quality of the investment. Since acquiring the building in 2012, JLL’s investment and management teams have worked collaboratively to crystallise the significant capital gain achieved since acquisition.”

“20 Moorgate, EC2 is a prime City asset let for a further 11 years to The Bank of England, forming a critical element of the bank’s central London estate. Having advised on a complex lease restructuring in 2012, JLL was jointly instructed on the sale of the asset on behalf of Deutsche Fonds Holding AG. This led to a successful sale to SEA Holdings, a new entrant to the market from Hong Kong, for a price of £155 million reflecting a net initial yield of 4.30% and a capital value of £1,100 per sq ft.”

Central London Office Market Report Q4 2016 | 5

The City prime rent has historically acted as a key indicator of the health of the market, rising when demand is strong and supply constrained, and falling when the market turns in the tenants favour. It has always represented a narrow cross section of the market, referring to the top rent achievable on single floor lettings of around 10,000 sq ft and excluding premiums due to height and outside space. However, in recent years a number of trends, which are examined below, have led to a greater variation in the level of rents achieved, making it increasingly difficult to define a single prime rent figure for the City as a whole.

Changing geography of the CityThe highest rents in the City have historically been achieved in the City core, within the traditional boundary of the square mile. In recent years the City market has expanded to the north into Shoreditch and Clerkenwell, east to Aldgate and south to South Bank, with much of this growth driven by migration of occupiers from other areas of the City and West End, often accustomed to paying higher rents. This has underpinned strong rental growth in these areas and has led to an increasing convergence of prime rents across City sub-markets.

Diversification of occupier profileThe changing geography of the City has, in large part, been driven by the diversification of the occupier profile. In previous cycles, financial services companies have paid the highest rents, and have typically located in the core areas of the City. The diversifying occupier base, and particularly the expansion of the technology and media sectors into the City has seen higher rents paid by other business sectors, alongside financial services.

Architectural merit increasingly important The closer spread of prime rents across City sub-markets mean that buildings with architectural merit and superior place making – that offer occupiers a ‘wow factor’ – have enabled landlords to achieve higher rents, through competition for unique space. The ‘war for talent’ has intensified this trend with an organisation’s workspace increasingly used as a differentiator by employers in order to attract and retain talent.

Issue to watch:What is the City prime rent?

Tower floors attract a rental premiumTower buildings are still relatively scarce in the City, despite a number of recent completions, representing around 6% of office stock. The scarcity of towers, the quality of the architecture and the views afforded from the upper floors, have allowed landlords to achieve significant premiums over prime rents for non-tower floors. This has been evident, to varying degrees, in all four of the recent tower completions: The Leadenhall Building, 20 Fenchurch Street, The Shard and 110 Bishopsgate.

Increasing variation around the prime rent These trends have all been apparent in 2016, with TMT occupiers paying rents in line with the City prime rent in Shoreditch and significant premiums achieved on upper floors of tower buildings, as well as on smaller units of space. All of these deals are excluded from the narrow definition of prime rent owing to location, height or size, as outlined in the graph below. While we expect the City prime rent and forecasts to remain relevant and a useful indicator, it doesn’t tell the full story. It is increasingly necessary to take a more granular approach when analysing the City market and moreover creating interesting space and amenity to enhance rental performance.

-

Increasing variation around the City prime rent

£110

£105

£100

£95

£90

£85

£80

£75

£70

£65

£ per

sq ft

Prime rentExcluded as prime rent evidence – TowerExcluded from prime rent evidence – Size

Prime rent evidenceExcluded from prime rent evidence – Location

Q1 2016 Q2 2016 Q3 2016 Q4 2016

6 | Central London Office Market Report Q4 2016

West End overview

Take-up and demandTake-up in Q4 reached 862,000 sq ft across 48 transactions which was 28% below the total for the previous quarter but in line with the 10 year average. For the year as a whole, take-up reached 3.6 million sq ft which was slightly below last year’s total of 3.7 million sq ft but above the 10 year average of 3.3 million sq ft despite a tough second half of the year. Take-up was dominated by a string of large deals above 50,000 sq ft. These included Westminster City Council who took 62,000 sq ft from Land Securities at 5 Strand, WC2 on a short term lease while their existing offices undergo refurbishment; and Argus Media Ltd who acquired 53,000 sq ft at Lacon London, WC1 on a 10 year lease. The stronger than expected run of take-up over the second half of the year in particular, highlights the fact that many occupiers are carrying on with business as usual despite the market uncertainty that lies ahead in terms of Brexit negotiations and the likelihood of increased inflationary pressures.

Pre-completion letting continued to be a key theme in Q4 and accounted for 25% of total take-up. For the year as a whole, pre-letting amounted to 40% of total take-up, which is the highest since 2001 when it formed 43% of take-up. Pre-completion deals in Q4 include The Office Group who took 56,000 sq ft at 1 Lyric Square, W6, paying a rent of £50 per sq ft on a 22 year lease and Skyscanner Ltd who acquired 24,000 sq ft at The Avenue, WC1.

“Pre-letting accounted for 40% of total take-up in 2016”

Take-up in Q4 was dominated by the TMT sector which had a share of 28% owing to large deals with Argus Media Ltd, Omnicom Group and Schibsted Media Group. This was followed by the wider services sector (22%) and the professional services sector (19%).

Overall demand stands at 5.6 million sq ft, which is below the Q3 total of 6.0 million sq ft but above the 10 year average of 5.2 million sq ft. Falls were seen in both active and potential requirements. Active demand stands at 3.8 million sq ft and is above the 10 year average of 3.1 million sq ft. The TMT sector represents 36% of all active requirements, followed by the wider services sector (17%) and the public administration sector (16%).

Key active requirements in Q4 included Avenues: The World School (150,000 sq ft), CDC Group plc (60,000 sq ft – 70,000 sq ft), FORA

(25,000 sq ft – 50,000 sq ft) and Halkin Management (25,000 sq ft – 50,000 sq ft). All of these requirements are expansion driven.

Existing and future supplyOverall supply increased 4% in Q4 to 3.8 million sq ft. This was mainly due to an increase in newly available supply following speculative development completions at Nova South, SW1 (167,000 sq ft), LSQ London, W1 (83,000 sq ft) and 1 and 2 St James’s Market, SW1 (116,000 sq ft). This equates to an overall vacancy rate of 4.1% which remains below the 10 year average of 4.4%. Grade A vacancy increased from 3.4% to 3.7%.

The volume of space under construction speculatively decreased in Q4 to 3.2 million sq ft compared to 3.4 million sq ft in Q3. Looking ahead to 2017, speculative development completions are expected to total 1.6 million sq ft with the majority of new space coming through in Victoria (30%), Hammersmith (11%) and Fitzrovia (10%).

RentsPrime rents in the core were reduced in Q4 to £110 per sq ft from £115 per sq ft in Q3 (assuming a 10,000 sq ft floor plate and a 10 year term), due to more subdued demand at the premium end of the market.

InvestmentInvestment volumes reached £1.6 billion in Q4 which was above the Q3 figure of £1.1 billion and also above the 10 year average of £1.3 billion. Full year investment volumes totalled £5.2 billion, which is below last year’s total of £7.1 billion but in line with the 10 year average. Key deals include: the acquisition of Holborn Links, WC1 in Bloomsbury by Citwax Investments Ltd for £300 million; 1 Dean Street, W1 which was acquired by Norges Bank Investment Management from Great Portland Estates for £276.5 million, a net initial yield of 3.30% and a capital value of £3,047 per sq ft and Kaupthing Bank’s 50% interest in 1 & 2 Fitzroy Place, W1 which was purchased by Ashby Capital for £217 million, a net initial yield of 4.25% and a capital value of £1,750 per sq ft.

Prime yields remained unchanged in Q4 at 3.5% for sub £10 million, 3.75% for £10 - £80 million lot sizes and 4.0% for lot sizes over £80 million.

Amy Birdee Associate Director

Central London Office Market Report Q4 2016 | 7

Victoria 30%

Fitzrovia 11%

Purchaser type

Share of overall take-upPre-PC leasing

Milli

ons

sq ft

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2006 20152007 2008 2009 2010 2011 2012 2013 2014 2016

Pre-let

2005

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%Pre-leasing

Investment volumes

Key deals

Banking & finance 9%

Professional 9%

Service 17%

Manufacturing 12%

TMT 36%

Public & administrative 16% 3.8million

sq ft10 year average 3.1 million sq ft

Active demand

Under construction

Millions sq ft New 10 yr averageRefurbished

2006 20152007 2008 2009 2010 2011 2012 2013 2014

Second hand Pre-let/Under construction

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

2016

2017

2.7 million sq ft

under construction, of which

1.6 million sq ft under

construction speculatively

Hammersmith11%

Paddington9%

Jagex10,587 sq ft£107.50 per sq ft

30 Broadwick Street W1

Pre-let deal

Private investors/owner occupiers

Institutions

Mirabaud14,873 sq ft

Verde SW1

Pre-let deal

A.T. Kearney16,200 sq ft £105.00 per sq ft

Adelphi WC2

Pre-let deal

2014

£5.9 billion

2015

£7.1 billion

2016

£5.2 billion Property

companies

Other

1%28%41%

30%

Take-up

8 | Central London Office Market Report Q4 2016

Take-up and demand Take-up volumes recovered in the final quarter of 2016, reaching 1.7 million sq ft, the strongest quarter of the year, and 25% ahead of the 10 year quarterly average. Full year take-up reached 5.3 million sq ft, which represents a slowdown on the previous three years, but is close to the 10 year annual average of 5.6 million sq ft, and surpasses expectations in the aftermath of the EU referendum.

Banking and finance sector occupiers accounted for the largest share of quarterly take-up with 495,000 sq ft leased in 18 transactions, including major pre-let deals to Barings who have committed to 109,000 sq ft at 20 Old Bailey, EC4 and 106,000 sq ft to Fidelity International at 4 Cannon Street, EC4. The TMT sector was also prominent in Q4, with major deals including 50,000 sq ft acquired by Deliveroo at Cannon Bridge House, EC4 and 37,000 sq ft leased to NTT Europe at 1 King William Street, EC4. WeWork continued its rapid expansion in London, completing a further four transactions totalling 244,000 sq ft, including 57,000 sq ft at 15 Bishopsgate, EC2 and 59,000 sq ft at The Bower, EC1.

Overall demand decreased 10% to 9.3 million sq ft, compared to 10.3 million sq ft at the end of the previous quarter and is now 7% below the 10 year quarterly average. The quarterly fall was driven by a 26% decrease in potential demand which ended the quarter at 3.4 million sq ft, down from 4.6 million sq ft at the end of Q3. Active demand increased marginally to 5.9 million sq ft, compared to 5.7 million sq ft at the end of Q3 and is now broadly in line with the 10 year average. The banking and finance and TMT sectors account for the largest shares of active demand, each accounting for 26%. Professional services and service industries are also prominent with 22% and 18% shares respectively.

Existing and future supplySupply increased marginally with the extent of the rise limited by the recent uptick in leasing velocity and a number of major development completions being delayed from Q4 2016 to Q1 2017. Overall supply currently stands at 4.5 million sq ft, equating to an overall vacancy rate of 4.0%, which remains significantly lower than the 10 year average of 6.4%. Six schemes completed in Q4 totalling 896,000 sq ft, with around half of this total let ahead of completion. Major completions included: 273,000 sq ft at One Creechurch Place, EC3; 258,000 sq ft at 1 New Street Square, EC4 which is fully let to Deloitte; and the 71,000 sq ft refurbishment of 70 Wilson Street, EC2.

City overview

James Norton Associate Director

Supply is expected to increase in early 2017 with 2.6 million sq ft under construction speculatively and 905,000 sq ft due to complete in Q1 alone. This includes a number of schemes which were originally expected to complete in 2016, notably One Angel Court, EC2 which totals 296,000 sq ft; the remaining 61,000 sq ft at White Collar Factory, EC1; and 98,000 sq ft at 28 Chancery Lane, WC2. The total volume of floorspace under construction speculatively increased 10% to 5.6 million sq ft, largely due to construction starting at 22 Bishopsgate, EC2 which will total 1.3 million sq ft, and is scheduled to complete in 2019.

RentsCity prime rents remained unchanged at £70 per sq ft, while incentives moved out to 24 months rent free on an assumed 10 year term. As a result of the continued uncertainty following the EU referendum, net effective rents remain under pressure, with occupiers seeking extended rent free periods and greater lease flexibility, although the impact is mitigated somewhat by the low vacancy rate.

Investment volumes and yieldsInvestment volumes rebounded strongly in Q4 totalling £2.6 billion across 42 transactions, nearly three times the previous quarters total of £891 million and 40% ahead of the 10 year quarterly average of £1.8 billion. The strong final quarter boosted full year turnover to £7.4 billion, significantly lower than 2015’s exceptional total of £10.2 billion, but only 5% lower than the 10 year average of £7.8 billion. Brookfield Asset Management’s purchase of CityPoint, EC2 for £561.5 million, reflecting a net initial yield of 4.30% and a capital value of £791 per sq ft, was the largest transaction of the year. There were a further six transactions of lot sizes in excess of £100 million completed in Q4, all of which were acquired by overseas capital, including Moor Place, EC2 purchased by Kingboard Investments Limited for £271 million, a net initial yield of 4.86%; 45 King William Street, EC4 purchased by Al Ain Properties for £105 million, a net initial yield of 4.41%. The dominance of overseas buyers for larger lot sizes meant that overseas capital accounted for an 84% share of quarterly investment turnover.

Following a 25 basis points adjustment in Q2, prime yields remained unchanged in Q4 at 4.25% across all lot sizes.

Central London Office Market Report Q4 2016 | 9

2016 £7.4 billion

2017 2018 2019

TOTAL SQ FT2.6

million sq ft

TOTAL SQ FT1.5

million sq ft

TOTAL SQ FT1.5

million sq ft

10 year average£7.8 billion

Vacancy Key deals

Active demand

TMT TMT

Banking & finance

Public & administrative 6%

Manufacturing 2%

Service 18%

Professional

26%

%

22%

26

Q3 20165.7

million sq ft

2015£10.2 billion

Q4 20165.9

million sq ft

10 year average5.8

million sq ft

Speculative under construction

14%

12%

10%

8%

6%

4%

2%

0%2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Overall 10 year average

Investment volumes

Barings

109,000 sq ft£65 per sq ft

20 Old Bailey, EC4

Pre-let

CMS Cameron McKenna

84,000 sq ft £67.50 per sq ft

Cannon Place, EC4

WeWork

59,000 sq ftConfidential rent

The Tower, The Bower, EC1

Pre-let

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

Millions sq ft New 10 year averageRefurbished Second hand Pre-let/Under construction

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

2016 purchaser origin

33%

85%100%

67%

15%

0%

81%Overseas investors

(2016)19%

UK investors

(2016)

New Refurbished

Take-up

10 | Central London Office Market Report Q4 2016

Docklands & East London overview

Take-up and demandTake-up was dominated by the Government Property Unit’s (GPU) acquisition of 524,000 sq ft at 20 Cabot Square, E14; the largest transaction of the year in Central London. As a result Q4 take-up reached 614,000 sq ft, boosting full year take-up to 1.2 million sq ft, slightly below the 10 year annual average of 1.3 million sq ft. There were a further four transactions completed in Q4 totalling 59,000 sq ft, including 37,000 sq ft leased to Capgemini UK at 5 Canada Square, E14 and 10,000 sq ft acquired by Energy Aspects at 25 Canada Square, E14. Floor space under offer fell significantly due to the completion of the GPU transaction and now stands at 112,000 sq ft.

Overall demand decreased 14% to 4 million sq ft and remains significantly higher than the 10 year average of 2.7 million sq ft. The quarterly fall in demand was driven by a 60% fall in potential demand which ended the quarter at 855,000 sq ft, while active demand increased 28% quarter-on-quarter to 3.1 million sq ft. Notable active requirements include: Hogan Lovells (300,000 – 350,000 sq ft), Cancer Research UK (100,000 – 150,000 sq ft) and BGC Partners (100,000 – 120,000 sq ft).

Existing and future supply Overall supply fell 20% to 1.1 million sq ft, reflecting an overall vacancy rate of 5.1%. The Columbus Building, E14 (146,000 sq ft) and Here East, E20 where 272,000 sq ft is available at the Press Centre (143,000 sq ft) and Broadcast Centre (129,000 sq ft) are the largest single units of immediately available supply. Tenant controlled space accounts for a major share of supply, including 130,000 sq ft at 5 Churchill Place, E14 on a sublease from JP Morgan and 102,000 sq ft at 25 Canada Square, E14 on a sublease from Citibank. Construction started on the refurbishment of the 201,000 sq ft Anchorage House, E14, the first phase of the redevelopment of Republic (formerly East India Dock), which is scheduled to complete in Q3 2017.

RentsPrime rents in Canary Wharf, the benchmark for East London, remained unchanged at £47.50 per sq ft, with the high proportion of tenant controlled space limiting rental growth. Rental growth has been evident on transactions of less than 10,000 sq ft, due to the dearth of supply of this size band, with a record rent of £57 per sq ft having recently been achieved on the 28th floor of 1 Canada Square, E14.

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Prime rentOverall vacancy rate

£30

£35

£40

£45

£50

£55

0%

2%

4%

6%

8%

10%

12%

14%

per s

q ft

Take-up

Active demand

Banking & finance

Public & administrative 18%

Professional services 14%

TMT 26%

Manufacturing 5%

Service industries 16%

21%

Active demand

3.1 million sq ft

10 year average 1.7m sq ft

Prime rents and vacancy

Millio

ns sq

ft

0

0.5

1.0

1.5

2.0

2.5

3.0

3.5 10 year averageTake up

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

0

500

1000

1500

2000

2500

3000

3500

Investment volumesThere was a single investment transaction in Q4: 3 Harbour Exchange, E14 was purchased by Infinitus Global, their debut acquisition in London, for £37 million, reflecting a net initial yield of 7.50% and a capital value of £402 per sq ft. Investment turnover totalled £250 million in 2016, a significant fall of the previous year’s total of £1.2 billion, and the lowest annual total since 2011.

Central London Office Market Report Q4 2016 | 11

Rental conditions in Central London

£104.98£65.00

FITZROVIA

MAYFAIR

VICTORIA

BELGRAVIA &KNIGHTSBRIDGE

KENSINGTON & CHELSEA

HAMMERSMITH

PADDINGTON

KING’S CROSS

SOHO

BLOOMSBURY

CAMDEN

CLERKENWELL

SHOREDITCH

CANARY WHARF

STRATFORD

NORTHERN

CITY CORE

EASTERN

ALDGATE

BATTERSEA

VAUXHALL

WATERLOO

SOUTHBANK

SOUTHERN

WESTERNCITYMIDTOWN

NORTH OFOXFORD STREET

ST. JAMES’S

COVENTGARDEN

£73.77£50.00

£101.72£67.50

£100.61£70.00

£100.61£70.00

£90.80£67.50

£90.56£62.50

£96.75£67.50

£84.97£60.00

£81.75£57.50

£169.04£110.00

£116.52£77.50

£73.77£50.00

£137.85£85.00

£76.16£50.00

£95.45£65.00

£169.04£110.00

£137.01£87.50

£110.21£75.00

£131.05£87.50

£120.21£85.00

£110.09£72.50

£77.97£53.00

£117.59£80.00

HYDE PARK

REGENT’SPARK

£100.61£70.00

£90.91£70.00

£100.61£70.00

PRIME RENTS

OCCUPANCY COSTS

£57.10£40.00

£73.18£47.50

£105.56£77.50

£110.09£72.50

MARYLEBONE

EUSTON

Leasing

Neil Prime Director Head of Central London Markets +44(0)20 7399 5190 [email protected]

Adrian Crooks Director Central London Agency +44 (0)20 7399 5135 [email protected]

Dan Burn Director Central London Agency +44 (0)20 7399 5966 [email protected]

Capital Markets

Julian Sandbach Director Head of Central London Capital Markets +44 (0)020 7399 5973 [email protected]

Andrew Hawkins Director Central London Capital Markets +44(0)20 7399 5840 [email protected]

Research

Jon Neale Head of UK Research UK Research +44(0)20 7852 4685 [email protected]

Ben Burston Head of UK Office Research UK Research +44 (0)20 7399 5289 [email protected]

Alex Hodge Director UK Marketing +44(0)20 7399 5735 [email protected]

Contacts

jll.co.uk

© 2017 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to Jones Lang LaSalle and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of Jones Lang LaSalle and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of Jones Lang LaSalle. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof.