Economic Context - New London Architecturenewlondonarchitecture.org/docs/dan_bayley_-_bnp... · Insurance Serviced Offices Professional Services, The Service Sector, Banking and Finance

Economic Context 1 NLA Conference Sep 2014 1

NLA Conference Sep 2014

London & UK economic indicators

-8 -6 -4 -2 0 2 4 6 8

10 12

GDP Growth (%)

UK London

-1 -0.5

0 0.5

1 1.5

2 2.5

3

Working Age Population Growth (%)

UK London

-6

-4

-2

0

2

4

6

House Hold Disposable Income Growth (%)

UK London

•  GDP growth long term average UK 2.5% vs London 3.1%

•  Household disposable income long term

average UK 2.8% vs London 2.9%

•  Working age population growth long term average UK 0.45% vs London 0.80%

•  Between 2015 and 2018 we forecast that London will experience above trend growth across all of these indicators

2

Change in Occupier Profile 2 NLA Conference Sep 2014 3

4 NLA Conference Sep 2014

Central London take-up by Sector

2007

Professional services Service sector Banking and finance Associations Property and construction

2013

Professional services

Service sector

Banking and finance

Professional services Service sector Banking and finance Associations Property and construction Corporate TMT Public sector Unknown Retailer Insurance Serviced Offices

Professional Services, The Service Sector, Banking and Finance made up over 50% of deals in 2007

By 2013 their share of annual take-up had fallen to 33%. With the TMT sector now accounting for 30%


Office vacancy

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

18.0%

EC1 City


Southbank take-up

More London, 2&3 Bankside The News Building, Sea Containers

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

2005 2006 2007 2008 2009 2010 2011 2012 2013 H1 2014

Take-up 5 year ave. Take-up million sq ft

Traditional Occupiers 3 NLA Conference Sep 2014 7


Central London office deals

Date% Address% Postcode% Tenant% Floor% Size%

Sep$13' The'News'Building' SE1' News'Interna9onal' En9re'Building' 430,000'

Dec$13' One'London'Wall'Place' EC2' Schroders' En9re'Building' 310,000'

Aug$13' Sea'Containers'House' SE1' Ogilvy'&'Mather'Limited' En9re'Building' 226,000'

Jul$14' 25'Churchill'Place' E14' EY' 14th'to'21st' 205,000'

Jul$14' Two'New'Ludgate' EC4' Mizuho'Bank' En9re'Building' 198,000'

Jul$13' Cannon'Place' EC4' CMS' '1st,'2nd,'3rd' 140,000'

Feb$14' 8$10'Moorgate' EC2' ING'Bank' En9re'Building' 120,000'

Growing Occupiers 4 NLA Conference Sep 2014 9


The growth of the TMT & serviced office sectors

0%

5%

10%

15%

20%

25%

30%

35%

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

TMT Serviced Office Percentage of Central London take-up


Amazon London office deals

Date% Address% Postcode% Tenant% Floor% Size% Type%of%Space%S7ll%in%Occupa7on?%

Mar$12' The'Glasshouse' EC1' Amazon'(Push'BuYon)' En9re'Building' 47,560' First'Move' Yes'



May$13% Sixty'London' EC1' Amazon' En9re'Building' 212,995' Expansion' Yes'




Sep$14% Leadenhall'Court' EC1' Amazon' En9re'Building' 86,200' Overflow'Space' Yes'




Sep$14% Leadenhall'Court' EC1' Amazon' En9re'Building' 86,200' Overflow'Space' Yes'

Sep$14' Principal'Place' EC2' Amazon'Whole'office'space'

430,000' Consolida9on' Pre$let'


Google London office deals Date% Address% Postcode% Tenant% Floor% Size% Type%of%Space%

S7ll%in%Occupa7on?%

May$03' The'Courtyard,'SuYon'Row' W1' Google' 3rd,'4th,'5th'' 14,595' First'Move' No'

Date% Address% Postcode% Tenant% Floor% Size% Type%of%Space%S7ll%in%

Occupa7on?%


Aug$05'Belgrave'House,'76'Buckingham'Palace'Road'

SW1' Google' Part'4th'and'5th' 52,525' Expansion' Yes'

Jun$06'Belgrave'House,'76'Buckingham'Palace'Road'

SW1' Google' Part'3rd' 10,000' Expansion' Yes'

Nov$07'Belgrave'House,'76'Buckingham'Palace'Road'


Sep$08'Belgrave'House,'76'Buckingham'Palace'Road'



Occupa7on?%










Aug$10' 123'Buckingham'Palace'Road' SW1' Google' 3rd' 41,465' Expansion' Yes'

Mar$11' 123'Buckingham'Palace'Road' SW1' Google'Part'1st'

(1st)'37,442'(45,058)'

Expansion' Yes'


Occupa7on?%












(1st)'37,442'(45,058)'

Expansion' Yes'

May$11' Central'St'Giles' WC2' Google' 3rd'to'6th'+'9th' 157,562' Expansion' Yes'


Occupa7on?%












(1st)'37,442'(45,058)'

Expansion' Yes'


Sep$11% 4$5'Bonhill'Street'(Google'Campus)' EC2'Google'Campus'

En9re'Building' 24,883' Expansion' Yes'


Occupa7on?%












(1st)'37,442'(45,058)'

Expansion' Yes'




Mar$13% Kings'Cross'Central'(Dev'Site)' N1C' Google' Proposed'HQ'site' 800,000' Consolida9on' Site'Purchase'


Occupa7on?%












(1st)'37,442'(45,058)'

Expansion' Yes'




Mar$13% Kings'Cross'Central'(Dev'Site)' N1C' Google' Proposed'HQ'site' 800,000' Consolida9on' Site'Purchase'

Feb$14' 6'Pancras'Square' N1C' Google' Upper'Half' 163,477' Interim'Space?' Pre$let'

Changing Landscape 5 NLA Conference Sep 2014 13


Central London prime rents by sub market

2010 2014 Growth King's Cross £37.50 £68.50 83% Soho £52.50 £82.50 57% St James’s/Mayfair £90.00 £120.00 33% City Fringe £40.00 £52.50 31% City Core £53.50 £62.50 17%

2010 2014 King's Cross £37.50 £68.50 Soho £52.50 £82.50 St James’s/Mayfair £90.00 £120.00 City Fringe £40.00 £52.50 City Core £53.50 £62.50

Market 2010 King's Cross £37.50 Soho £52.50 St James’s/Mayfair £90.00 City Fringe £40.00 City Core £53.50


Right mix of space?


Something different

Alphabeta

Buckley building


Mixed use / Critical mass

King’s Cross Central The International Quarter


Fit for purpose

Upper Bank Street

10 Aldermanbury

125 London Wall


Iconic / Luxurious

The Shard

10 New Burlington Street

The Future? 6 NLA Conference Sep 2014 20


Challenges


Opportunities

Documents

Economic Context - New London Architecturenewlondonarchitecture.org/docs/dan_bayley_-_bnp... · Insurance Serviced Offices Professional Services, The Service Sector, Banking and Finance