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CoStar Group 2013 Investment Review
1
UK CRE INVESTMENT REVIEW
£52.7bn of commercial property traded in 2013A NEW DAWN for UK Investment
YEAR 2013
Sponsored By
CoStar Group 2013 Investment Review
2
£52.7bn*up 56%
invested in UK commercialproperties in 2013
on 2012 investment
£19.5bn6-year hightraded in
Q4 alone, a
up 53%
up 32%
compared to 2012
year-on-year
£17.7bn invested in Central London offices,
£4.1bn of shopping centre investment
81%to £9.2bn
Asianinvestment
rose by
*Excluding the £1.7bn More London deal, which completed in January 2014
Every effort has been made to ensure the accuracy of the information held within this report. The publisher cannot accept liability for any loss/damage which may arise as a result of any error or omission of any data. Any data reproduced from this analysis must be accredited to CoStar.
2013 Key Figures
CoStar Group 2013 Investment Review
3
Access the UK commercial real estate market’s
most comprehensive record of completed
investment transactions, independently verified
by the largest property research team.
CoStar’s proprietary data, which underpins this
report, is sourced directly from UK property
agents, investors and other involved parties to
accurately reflect the transactional market.
The research team typically records 600+
investment deals per quarter, more than any
other data source.
CoStar’s UK Analytics team then provides
top-down analysis of the UK market, breaking
down investment trends by sector, sub-sector,
geography, lot size, investor type, and yield,
among other metrics.
This combination of CoStar’s Research and
Analytics offers the most comprehensive macro-
to-micro explanation of the story behind 2013’s
£52.7bn transaction volume, a year which will
long be remembered as the start of a new phase
in the UK property cycle.
For more information on our methodology or the data in this report please contact one of the authors below
Analytics queries to
Mark Stansfield
Senior Research Analyst
T: 020 3205 4589
Alimou Bah
Real Estate Economist
T: 020 3205 4567
Francesca Cooke
Real Estate Economist
T: 020 3205 4624
Data queries to
Grant Lonsdale
Research Associate
T: 0141 354 0646
Iain Smyth
Senior Research Associate
T: 0141 354 0629
Ola Dawodu
Research Associate
T: 0141 354 0683
Information you can’t get anywhere else
CoStar Group 2013 Investment Review
4
Backdrop to the Investment Surge: the UK Economy’s ‘Lazarus-like Transformation’ in 2013
The eyes of shrewd UK property investors were
vigilant to a raft of global uncertainties, which
still had the capacity to destabilise what, at the
time, was considered a fragile macro recovery.
But in the early months of 2013, the UK
economy surprised on the upside driven
by a combination of the Bank of England’s
sustained low interest environment and
Quantitative Easing (QE) programme together
with the growth in consumer spending –
spurred by falling unemployment and inflation,
as well as rising house prices as a result of the
government’s Funding for Lending Scheme.
Worst-Case Scenario Fears Recede
Perhaps the most significant of all individual
factors was the improvement in investors’
risk appetite as worst-case scenario fears for
the breakup of the eurozone and the single-
currency receded. The net effect of each of
these positive influences was to crystallise a
“Lazarus-like transformation” in the fortunes
There was not a bull in sight at
the turn of 2012 that predicted
annual UK investment volumes
would be as high as £52.7bn*
for 2013. Popular wisdom implied
transactional activity would
be broadly in line with the
previous year’s £33.7bn, or a
modest improvement at best.
* Excluding the £1.7bn More London deal, which completed in January 2014
CoStar Group 2013 Investment Review
5
of the UK economy, as characterised by
Goldman Sachs chief UK economist, Kevin
Daly.
UK, Europe and the US central bank policies
of ‘monetary assistance’ delivered the desired
stabilisation effects over 2013, with the
large scale asset purchase programme of
predominantly gilts and government-backed
securities increasing liquidity in global
financial markets.
The “Global Hunt For Yield”
The consequence of this was a dampening in
bond yields which, in turn, prompted multi-
asset class investors, particularly pension
and insurance funds, to seek higher yielding
investments elsewhere in an effort to match
their capital to their long-term liabilities.
And so this “global hunt for yield” –
strengthened over the course of 2013 – drove
capital flows into global real estate markets,
including into the UK.
This resulted in a broader pool of capital
seeking deployment in real estate markets –
across equity and debt – as well as in higher-
yielding stock, which helped to finally thaw
demand for secondary property over the year.
Furthermore, the normalisation of lending
markets in 2013, with greater numbers of
non-bank lenders supporting banks’ increased
capacity to lend both in greater volumes and
higher up the risk curve, crucially helped to
lubricate transactional markets.
Concurrently, sovereign wealth funds, from
the Middle East, Europe and Asia, as well as
super wealthy individuals and family offices,
continued to seek opportunities to deploy
capital into London’s trophy assets, seeking
the familiar “safe-haven” benefits of one of the
world’s pre-eminent centres for global capital
and liquidity.
Against this backdrop, the improved economic
picture helped strengthen occupier markets,
which in turn supported rental growth. All
of which provides the context for 2013’s
memorable £52.7bn six-year high for UK
annual transaction volumes, as captured by
CoStar’s UK Investment Bulletin.
Liked this article?
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James Wallace is
the Finance editor
at CoStar News.
CoStar Group 2013 Investment Review
6
Major Events - Q1 2013
INVE
STM
ENT
JANUARY FEBRUARY MARCH APRIL MAY JUNE
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
INVE
STM
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LEAS
ING
98.397.3 97.8
ECO
NO
MIC
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TIM
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+
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JULY AUGUST SEPTEMBER
INVE
STM
ENT
LEAS
ING
ECO
NO
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OCTOBER NOVEMBER DECEMBER
INVE
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NO
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100
110
120
90
96.597.9 97.7
100
110
120
90
104.8
108.7
115.3
100
110
120
90
100
110
120
90
115 115.2 115.1
Google takes circa 900,000 SF of offices at King's Cross in a major shot in the arm for one of the UK's most important regeneration schemes
Blockbuster, Jessops and HMV among the high-profile administrations in the post-Christmas retail bloodbath
Shopping Centres back in vogue as Midsummer Place in Milton Keynes, the Wereldhave Portfolio and the Grosvenor Shopping Centre Fund all trade within weeks of each other for a combined £680m
John Lewis signs for a further 675,000 SF of design and build warehouse space at Magna Park, as retailers continue to drive the logistics market
Trinity Shopping Centre in Leeds opens its doors to the public with 95% of space let or under offer. At 1m SF it is the biggest shopping centre to open in Western Europe in 2013
Abu Dhabi Investment Authority (ADIA) buys 42 Marriott hotels from RBS for £620m
Citi Tower in London’s Canary Wharf sold for £1bn
London triple whammy: The Adelphi, 10 Paternoster Square and 88 Wood Street each sold in April for prices exceeding £200m. Foreign investors were both buyer and seller in each deal
Competitive bidding sees the price for IQ Winnersh rise to £245m, in a sign of high demand for South East offices
News Corp pre-lets 430,000 SF at The Place
in London Bridge, SE1
British Land acquires Paddington Central in a £476m deal. It is the largest of 29 deals above £100m in Q3 2013
LondonMetric Distribution portfolio sold for £248m in the largest industrial deal of the year
Telereal Trillium puts 55-property RBS portfolio up for sale for £550m, anchored by the Strand HQ of Coutts, the Queen's bank. It is one of the largest UK property portfolios brought to market in 2013
The Crown Estate and Oxford Properties complete a £320m agreement to finance a major redevelopment of St. James's Market in Central London
Q3 UK investment volumes top £12bn, a new post-crisis record quarter
KPMG signs a lease for 205,000 SF at 30 North Colonnade in London Docklands. The space had been on the market for more than 5 years
New Bank of England governor Mark Carney announces forward guidance policy
PMI indicators soar in all regions as business confidence returns in earnest
UK consumer confidence rises to -1, the highest level since April 2005 and up from -18.1 in March 2013
Confidence in the UK's crucial service sector jumps to 29.4, the highest level since June 1998 and up from -22.3 at the end of 2012
UK GDP grows by 1.9% in 2013, the strongest year since 2007
Sirosa purchases 80 Strand in London's Midtown for £610m at a yield of 4.2%
A German open-ended fund managed by Deka acquires the St. Botolph Building in the City of London for £464m
Newcastle NHS Foundation Trust takes 99,000 SF at Regent Point in Newcastle in a further boost to regional take-up
DNB Bank and XChanging plc take a combined 75,000 SF at London's Walbrook Building, taking the long-vacant 420,000 SF office building to 77% let
GIC aquires Blackstone's stake in Broadgate in the City for £1.7bn in the UK's largest ever UK property deal
Schroders pre-lets 309,500 SF at 1
London Wall Place in the City's biggest letting of the year
UK commercial property investment rises to £52.7bn, the strongest year since 2007
St Martins exchanges contracts to buy More London for £1.7bn. The deal completed in January 2014
20 Grosvenor Square in Mayfair sold to ADIA for £260m
Deutsche Bank takes 134,000 SF at 5 Brindleyplace in Birmingham in a welcome sign of a financial services firm recommitting to a regional centre
Amazon signs 213,000 SF pre-let at Sixty London in a
key London office deal
Yorkshire Building Society leases 76,000 SF at Broad
Gate in Leeds in what was a very strong year for the city
Noble (Servco) UK pays £120/SF to lease 8,000 SF at Devonshire House in Mayfair, the UK's highest rent since 2007
Calton Square in Edinburgh sold to GLL Real Estate Partners for £57m at a yield of 7.25%. It is the biggest conventional office investment deal outside of London and the South East in 2013
Fears of another recession as UK GDP falls by 0.2% in Q4 2012
UK loses AAA rating for first time since 1978
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
UK consumer confidence slumps to -18.1
UK economy narrowly avoids another recession with GDP growing by 0.3% in Q1
Positive momentum builds as UK economy expands by 0.7% in Q2.
Annual growth of 1.3% is strongest GDP growth since Q1 2011
Prince George!
£12bn
£ ££ £ £ £ ££ £ £ £ £££££
Al-Jazeera agrees deal to become first office tenant at The Shard
GDP
GDP
Aaa
CoStar Group 2013 Investment Review
7
Major Events - Q2 2013
INVE
STM
ENT
JANUARY FEBRUARY MARCH APRIL MAY JUNE
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
INVE
STM
ENT
LEAS
ING
98.397.3 97.8
ECO
NO
MIC
SEN
TIM
ENT
+
-
JULY AUGUST SEPTEMBER
INVE
STM
ENT
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
OCTOBER NOVEMBER DECEMBER
INVE
STM
ENT
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
100
110
120
90
96.597.9 97.7
100
110
120
90
104.8
108.7
115.3
100
110
120
90
100
110
120
90
115 115.2 115.1
Google takes circa 900,000 SF of offices at King's Cross in a major shot in the arm for one of the UK's most important regeneration schemes
Blockbuster, Jessops and HMV among the high-profile administrations in the post-Christmas retail bloodbath
Shopping Centres back in vogue as Midsummer Place in Milton Keynes, the Wereldhave Portfolio and the Grosvenor Shopping Centre Fund all trade within weeks of each other for a combined £680m
John Lewis signs for a further 675,000 SF of design and build warehouse space at Magna Park, as retailers continue to drive the logistics market
Trinity Shopping Centre in Leeds opens its doors to the public with 95% of space let or under offer. At 1m SF it is the biggest shopping centre to open in Western Europe in 2013
Abu Dhabi Investment Authority (ADIA) buys 42 Marriott hotels from RBS for £620m
Citi Tower in London’s Canary Wharf sold for £1bn
London triple whammy: The Adelphi, 10 Paternoster Square and 88 Wood Street each sold in April for prices exceeding £200m. Foreign investors were both buyer and seller in each deal
Competitive bidding sees the price for IQ Winnersh rise to £245m, in a sign of high demand for South East offices
News Corp pre-lets 430,000 SF at The Place
in London Bridge, SE1
British Land acquires Paddington Central in a £476m deal. It is the largest of 29 deals above £100m in Q3 2013
LondonMetric Distribution portfolio sold for £248m in the largest industrial deal of the year
Telereal Trillium puts 55-property RBS portfolio up for sale for £550m, anchored by the Strand HQ of Coutts, the Queen's bank. It is one of the largest UK property portfolios brought to market in 2013
The Crown Estate and Oxford Properties complete a £320m agreement to finance a major redevelopment of St. James's Market in Central London
Q3 UK investment volumes top £12bn, a new post-crisis record quarter
KPMG signs a lease for 205,000 SF at 30 North Colonnade in London Docklands. The space had been on the market for more than 5 years
New Bank of England governor Mark Carney announces forward guidance policy
PMI indicators soar in all regions as business confidence returns in earnest
UK consumer confidence rises to -1, the highest level since April 2005 and up from -18.1 in March 2013
Confidence in the UK's crucial service sector jumps to 29.4, the highest level since June 1998 and up from -22.3 at the end of 2012
UK GDP grows by 1.9% in 2013, the strongest year since 2007
Sirosa purchases 80 Strand in London's Midtown for £610m at a yield of 4.2%
A German open-ended fund managed by Deka acquires the St. Botolph Building in the City of London for £464m
Newcastle NHS Foundation Trust takes 99,000 SF at Regent Point in Newcastle in a further boost to regional take-up
DNB Bank and XChanging plc take a combined 75,000 SF at London's Walbrook Building, taking the long-vacant 420,000 SF office building to 77% let
GIC aquires Blackstone's stake in Broadgate in the City for £1.7bn in the UK's largest ever UK property deal
Schroders pre-lets 309,500 SF at 1
London Wall Place in the City's biggest letting of the year
UK commercial property investment rises to £52.7bn, the strongest year since 2007
St Martins exchanges contracts to buy More London for £1.7bn. The deal completed in January 2014
20 Grosvenor Square in Mayfair sold to ADIA for £260m
Deutsche Bank takes 134,000 SF at 5 Brindleyplace in Birmingham in a welcome sign of a financial services firm recommitting to a regional centre
Amazon signs 213,000 SF pre-let at Sixty London in a
key London office deal
Yorkshire Building Society leases 76,000 SF at Broad
Gate in Leeds in what was a very strong year for the city
Noble (Servco) UK pays £120/SF to lease 8,000 SF at Devonshire House in Mayfair, the UK's highest rent since 2007
Calton Square in Edinburgh sold to GLL Real Estate Partners for £57m at a yield of 7.25%. It is the biggest conventional office investment deal outside of London and the South East in 2013
Fears of another recession as UK GDP falls by 0.2% in Q4 2012
UK loses AAA rating for first time since 1978
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
UK consumer confidence slumps to -18.1
UK economy narrowly avoids another recession with GDP growing by 0.3% in Q1
Positive momentum builds as UK economy expands by 0.7% in Q2.
Annual growth of 1.3% is strongest GDP growth since Q1 2011
Prince George!
£12bn
£ ££ £ £ £ ££ £ £ £ £££££
Al-Jazeera agrees deal to become first office tenant at The Shard
GDP
GDP
Aaa
CoStar Group 2013 Investment Review
8
Major Events - Q3 2013
INVE
STM
ENT
JANUARY FEBRUARY MARCH APRIL MAY JUNE
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
INVE
STM
ENT
LEAS
ING
98.397.3 97.8
ECO
NO
MIC
SEN
TIM
ENT
+
-
JULY AUGUST SEPTEMBER
INVE
STM
ENT
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
OCTOBER NOVEMBER DECEMBER
INVE
STM
ENT
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
100
110
120
90
96.597.9 97.7
100
110
120
90
104.8
108.7
115.3
100
110
120
90
100
110
120
90
115 115.2 115.1
Google takes circa 900,000 SF of offices at King's Cross in a major shot in the arm for one of the UK's most important regeneration schemes
Blockbuster, Jessops and HMV among the high-profile administrations in the post-Christmas retail bloodbath
Shopping Centres back in vogue as Midsummer Place in Milton Keynes, the Wereldhave Portfolio and the Grosvenor Shopping Centre Fund all trade within weeks of each other for a combined £680m
John Lewis signs for a further 675,000 SF of design and build warehouse space at Magna Park, as retailers continue to drive the logistics market
Trinity Shopping Centre in Leeds opens its doors to the public with 95% of space let or under offer. At 1m SF it is the biggest shopping centre to open in Western Europe in 2013
Abu Dhabi Investment Authority (ADIA) buys 42 Marriott hotels from RBS for £620m
Citi Tower in London’s Canary Wharf sold for £1bn
London triple whammy: The Adelphi, 10 Paternoster Square and 88 Wood Street each sold in April for prices exceeding £200m. Foreign investors were both buyer and seller in each deal
Competitive bidding sees the price for IQ Winnersh rise to £245m, in a sign of high demand for South East offices
News Corp pre-lets 430,000 SF at The Place
in London Bridge, SE1
British Land acquires Paddington Central in a £476m deal. It is the largest of 29 deals above £100m in Q3 2013
LondonMetric Distribution portfolio sold for £248m in the largest industrial deal of the year
Telereal Trillium puts 55-property RBS portfolio up for sale for £550m, anchored by the Strand HQ of Coutts, the Queen's bank. It is one of the largest UK property portfolios brought to market in 2013
The Crown Estate and Oxford Properties complete a £320m agreement to finance a major redevelopment of St. James's Market in Central London
Q3 UK investment volumes top £12bn, a new post-crisis record quarter
KPMG signs a lease for 205,000 SF at 30 North Colonnade in London Docklands. The space had been on the market for more than 5 years
New Bank of England governor Mark Carney announces forward guidance policy
PMI indicators soar in all regions as business confidence returns in earnest
UK consumer confidence rises to -1, the highest level since April 2005 and up from -18.1 in March 2013
Confidence in the UK's crucial service sector jumps to 29.4, the highest level since June 1998 and up from -22.3 at the end of 2012
UK GDP grows by 1.9% in 2013, the strongest year since 2007
Sirosa purchases 80 Strand in London's Midtown for £610m at a yield of 4.2%
A German open-ended fund managed by Deka acquires the St. Botolph Building in the City of London for £464m
Newcastle NHS Foundation Trust takes 99,000 SF at Regent Point in Newcastle in a further boost to regional take-up
DNB Bank and XChanging plc take a combined 75,000 SF at London's Walbrook Building, taking the long-vacant 420,000 SF office building to 77% let
GIC aquires Blackstone's stake in Broadgate in the City for £1.7bn in the UK's largest ever UK property deal
Schroders pre-lets 309,500 SF at 1
London Wall Place in the City's biggest letting of the year
UK commercial property investment rises to £52.7bn, the strongest year since 2007
St Martins exchanges contracts to buy More London for £1.7bn. The deal completed in January 2014
20 Grosvenor Square in Mayfair sold to ADIA for £260m
Deutsche Bank takes 134,000 SF at 5 Brindleyplace in Birmingham in a welcome sign of a financial services firm recommitting to a regional centre
Amazon signs 213,000 SF pre-let at Sixty London in a
key London office deal
Yorkshire Building Society leases 76,000 SF at Broad
Gate in Leeds in what was a very strong year for the city
Noble (Servco) UK pays £120/SF to lease 8,000 SF at Devonshire House in Mayfair, the UK's highest rent since 2007
Calton Square in Edinburgh sold to GLL Real Estate Partners for £57m at a yield of 7.25%. It is the biggest conventional office investment deal outside of London and the South East in 2013
Fears of another recession as UK GDP falls by 0.2% in Q4 2012
UK loses AAA rating for first time since 1978
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
UK consumer confidence slumps to -18.1
UK economy narrowly avoids another recession with GDP growing by 0.3% in Q1
Positive momentum builds as UK economy expands by 0.7% in Q2.
Annual growth of 1.3% is strongest GDP growth since Q1 2011
Prince George!
£12bn
£ ££ £ £ £ ££ £ £ £ £££££
Al-Jazeera agrees deal to become first office tenant at The Shard
GDP
GDP
Aaa
CoStar Group 2013 Investment Review
9
INVE
STM
ENT
JANUARY FEBRUARY MARCH APRIL MAY JUNE
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
INVE
STM
ENT
LEAS
ING
98.397.3 97.8
ECO
NO
MIC
SEN
TIM
ENT
+
-
JULY AUGUST SEPTEMBER
INVE
STM
ENT
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
OCTOBER NOVEMBER DECEMBER
INVE
STM
ENT
LEAS
ING
ECO
NO
MIC
SEN
TIM
ENT
+
-
100
110
120
90
96.597.9 97.7
100
110
120
90
104.8
108.7
115.3
100
110
120
90
100
110
120
90
115 115.2 115.1
Google takes circa 900,000 SF of offices at King's Cross in a major shot in the arm for one of the UK's most important regeneration schemes
Blockbuster, Jessops and HMV among the high-profile administrations in the post-Christmas retail bloodbath
Shopping Centres back in vogue as Midsummer Place in Milton Keynes, the Wereldhave Portfolio and the Grosvenor Shopping Centre Fund all trade within weeks of each other for a combined £680m
John Lewis signs for a further 675,000 SF of design and build warehouse space at Magna Park, as retailers continue to drive the logistics market
Trinity Shopping Centre in Leeds opens its doors to the public with 95% of space let or under offer. At 1m SF it is the biggest shopping centre to open in Western Europe in 2013
Abu Dhabi Investment Authority (ADIA) buys 42 Marriott hotels from RBS for £620m
Citi Tower in London’s Canary Wharf sold for £1bn
London triple whammy: The Adelphi, 10 Paternoster Square and 88 Wood Street each sold in April for prices exceeding £200m. Foreign investors were both buyer and seller in each deal
Competitive bidding sees the price for IQ Winnersh rise to £245m, in a sign of high demand for South East offices
News Corp pre-lets 430,000 SF at The Place
in London Bridge, SE1
British Land acquires Paddington Central in a £476m deal. It is the largest of 29 deals above £100m in Q3 2013
LondonMetric Distribution portfolio sold for £248m in the largest industrial deal of the year
Telereal Trillium puts 55-property RBS portfolio up for sale for £550m, anchored by the Strand HQ of Coutts, the Queen's bank. It is one of the largest UK property portfolios brought to market in 2013
The Crown Estate and Oxford Properties complete a £320m agreement to finance a major redevelopment of St. James's Market in Central London
Q3 UK investment volumes top £12bn, a new post-crisis record quarter
KPMG signs a lease for 205,000 SF at 30 North Colonnade in London Docklands. The space had been on the market for more than 5 years
New Bank of England governor Mark Carney announces forward guidance policy
PMI indicators soar in all regions as business confidence returns in earnest
UK consumer confidence rises to -1, the highest level since April 2005 and up from -18.1 in March 2013
Confidence in the UK's crucial service sector jumps to 29.4, the highest level since June 1998 and up from -22.3 at the end of 2012
UK GDP grows by 1.9% in 2013, the strongest year since 2007
Sirosa purchases 80 Strand in London's Midtown for £610m at a yield of 4.2%
A German open-ended fund managed by Deka acquires the St. Botolph Building in the City of London for £464m
Newcastle NHS Foundation Trust takes 99,000 SF at Regent Point in Newcastle in a further boost to regional take-up
DNB Bank and XChanging plc take a combined 75,000 SF at London's Walbrook Building, taking the long-vacant 420,000 SF office building to 77% let
GIC aquires Blackstone's stake in Broadgate in the City for £1.7bn in the UK's largest ever UK property deal
Schroders pre-lets 309,500 SF at 1
London Wall Place in the City's biggest letting of the year
UK commercial property investment rises to £52.7bn, the strongest year since 2007
St Martins exchanges contracts to buy More London for £1.7bn. The deal completed in January 2014
20 Grosvenor Square in Mayfair sold to ADIA for £260m
Deutsche Bank takes 134,000 SF at 5 Brindleyplace in Birmingham in a welcome sign of a financial services firm recommitting to a regional centre
Amazon signs 213,000 SF pre-let at Sixty London in a
key London office deal
Yorkshire Building Society leases 76,000 SF at Broad
Gate in Leeds in what was a very strong year for the city
Noble (Servco) UK pays £120/SF to lease 8,000 SF at Devonshire House in Mayfair, the UK's highest rent since 2007
Calton Square in Edinburgh sold to GLL Real Estate Partners for £57m at a yield of 7.25%. It is the biggest conventional office investment deal outside of London and the South East in 2013
Fears of another recession as UK GDP falls by 0.2% in Q4 2012
UK loses AAA rating for first time since 1978
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
Economic Sentiment Source: European Commission100 = Long-term average
Economic Sentiment Source: European Commission 100 = Long-term average
UK consumer confidence slumps to -18.1
UK economy narrowly avoids another recession with GDP growing by 0.3% in Q1
Positive momentum builds as UK economy expands by 0.7% in Q2.
Annual growth of 1.3% is strongest GDP growth since Q1 2011
Prince George!
£12bn
£ ££ £ £ £ ££ £ £ £ £££££
Al-Jazeera agrees deal to become first office tenant at The Shard
GDP
GDP
Aaa
Major Events - Q4 2013
CoStar Group 2013 Investment Review
10
TENANT NIA (SF)
Debenhams 138,630
H&M 21,671
Sports Direct 21,193
New Look 16,673
Gap 12,359
Zara 10,895
Barclays 10,397
Hollister 7,010
Topshop 6,329
Topman 6,329
MIDSuMMER PLAcE, MILToN KEYNES
Q1 2013 / Retail / Top Ten Tenants
The depth of information available in CoStar Suite
Q2 2013 / Inventory / Stellar Year For Leeds
-400
-200
0
200
400
600
800
2009 2010 2011 2012 2013
NET ABSORPTION (000s SF)
Broad Gate City Core Leeds
Yorkshire Building Society leases 76,000 SF at Broad Gate in Leeds in what was a
very strong year for the city.
Shopping Centres back in vogue as Midsummer Place in Milton Keynes, the
Wereldhave Portfolio and the Grosvenor Shopping Centre Fund all trade within
weeks of each other for a combined £680m.
Behind the Headline Deals:
CoStar Group 2013 Investment Review
11
Property Prologis Tamworth
RBA 594,488 SF
Year Built 1998
% Leased 100%
ceiling Height 34’1”
Loading Docks 64
Tenants Hermes Parcelnet Ltd
Euro Car Parts Ltd
LARgEST PRoPERTY IN LoNDoNMETRIc DISTRIBuTIoN PoRTFoLIo
Q3 2013 / Industrial / Largest Deal
Q4 2013 / Office Market / Momentum in London
Sirosa purchases 80 Strand in London’s
Midtown for £610m at a yield of 4.2%.
Previous sales of 80 Strand (Shell Mex
House) highlight the momentum in the
London office market.
LondonMetric Distribution portfolio sold for £248m in the largest industrial deal of
the year.
PRoPERTY DETAILS
DATE PRIcE YIELD BuYER SELLER25/10/13 £610m 4.2% Sirosa Liberty Westbrook Partners
06/07/07 £494m 5.15% Westbrook Partners WestLB Asset Management; Rotch Property Group
10/05/02 £327.5m 6.7% WestLB Asset Management; Rotch Property Group
Lehman Brothers
CoStar Group 2013 Investment Review
12
Best Data. Best Analytics
This report is based on CoStar’s proprietary data and provides the most accurate and independent perspective on the UK commercial property investment market.
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