Central London Market Report Q4 2012 - Jones Lang LaSalle

12 On Point • Central London Market • Fourth Quarter 2012
The Docklands & East London Office Markets
Occupier Take-up and Net Absorption
Just over 40,000 sq ft was let in Docklands in Q4, in three
transactions.
The largest of the three transactions was 21,800 sq ft,
which Deutsche Bourse took in 11 Westferry Circus, E14.
This takes the total for the whole year to 474,700 sq ft, a
West End: Take-Up 5 2001-2011 Q1
similar volume to 2011 and 2009 but below the long term 20 4
year average of 1.3 million
Source:
in this
Jones
volatile
Lang LaSalle
part of the market.
West End: 5 Take-Up 2001-20114
3
Q1
Source: Jones Lang LaSalle
5
Occupier Demand
Overall demand, including active and potential, ended the
0
Off Plan
4
3
2
1
2003 2004 2005 2006
year at 1.8 million sq ft.
2007 2008
Of this, active searches account for 620,800 sq ft and
Off Plan Under Construction
3
2
1
0
2002 2003 2004 2005 2006 2007 2008 2009
the balance is potential, including the Thomson Reuters’
requirement for up to 750,000 sq ft.
Under Construction Second hand
2
1
0
Docklands: Demand 2003-2012
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Professional services firms account for the two largest
Source: Jones Lang LaSalle
Second hand New
requirements 1 in the market, 0 although neither search is
6
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
confined to Docklands.
West End: Demand 2002-2011 Q1
New
0
Source: Jones Lang LaSalle
2002 2003 2004 West 2005 End: 2006 Demand 2007 2002-2011 2008 2009 Q1 2010 2011
m sq ft
m sq ft
4
Existing Supply West and End: the Development 12 Demand 2002-2011 Pipeline 10 Q1
Total supply has Source: crept Jones upwards Lang LaSalle over the second half of 2012,
10
8
to 1.4 million 12 sq ft, after dipping in the early months of the
year. It is now back to the 8same level as Q4 6 2011.
10
The vacancy rate is 7.0%, almost all of which is Grade A
(6.7%) space, although much
6
of it is second
4
hand.
m sq ft
8
6
Rents
2
0
4
Prime rents were £38.50 per sq ft at the end of Q4,
0
2
although none of the transactions completed in this quarter
were at that level.
0
Mar 02
Mar 03
m sq ft
Mar 04
Mar 05
West End: Take-Up 5 2001-2011 3 Q1
Source: Jones Lang LaSalle
West End: Vacancy Rates 2002-2011 Q1
Investment Volumes
Source: Jones Lang LaSalle
There was one West investment End: Vacancy transaction Rates in 2002-2011 Docklands Q1
9%
in Q4;
Source: Jones Lang LaSalle
6 Greenwich View Place 8% was sold for £41 million to Legal
9%
and General by the occupier, 7% Telstra, which has taken a
8%
25-year lease with RPI uplifts. 6% The yield equates to 5.76%.
availability (%) of overall stock
7%
6%
5%
4%
3%
2%
1%
0%
ar 02
availability (%) of overall stock
ar 03
4
Mar 06
m sq ft
12
Source: Jones Lang LaSalle
Mar 02
5%
4%
3%
2%
1%
0%
ar 04
Mar 02
ar 05
Mar 03
Mar 03
m sq ft
ar 06
Mar 04
Mar 04
2
3
Mar 02
Mar 07
an 07
Mar 05
Mar 05
Mar 03
Mar 08
an 08
Mar 06
Mar 06
m sq ft
Mar 04
Mar 09
ar 09
Mar 07
Man 07
2
m sq ft
4
2
1
Docklands: Take-Up 2003-2012
Source: Jones Lang LaSalle
West End: Take-Up 2001-2011 Q1
Source: Jones Lang LaSalle
Mar 05
Mar 10
ar 10
Mar 08
Man 08
Mar 06
Mar 11
ar 11
Mar 09
availability (%) of overall stock
m sq ft
Mar 09
4
2
0
Mar 07
Dec 03
Dec 04
Active
Dec 05
Dec 06
Dec 07
Dec 08
2010
Off Pla
Off Plan
Under
Off Plan
Under ConstructionSecon
New
Under Construction Second hand
2009
2010
Second hand
2011
New
Dec 09
Rolling 12 Month Take-Up
Docklands: Potential Vacancy Rates 2003-2012
Source: Jones Lang LaSalle
Rolling 12 Month Take-Up
16%
14%
12%
10%
8%
6%
4%
2%
0%
Mar 10
Dec 03
Mar 10
Mar 08
Mar 11
Dec 04
Mar 09
Overall
Mar 11
Grade A
Dec 05
Mar 10
Active
Potential
Dec 06
Mar 11
Dec 07
Overall
Grade A
Dec 08
Active
Potential
Dec 10
2011
Dec 11
2012
New
Dec 12
Rolling 12 Month Take-Up
Dec 09
Dec 10
Dec 11
Dec 12
Poten
Active
Rollin
Gra
Ove