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City and Tech Belt take-up
▪ Take-up in August 2017 reached 908,460 sq ft bringing the total for Q3 so far to 1.3m sq ft. This is 29% up on this point last year, and 82% of the transactions were of a grade A standard.
▪ August take-up was significantly boosted by Deutsche Bank’s 570,000 sq ft pre-let at 21 Moorfields
▪ The 12-month rolling total take-up is 6.8m sq ft at the end of August, up on the LT average by 38%.
▪ Total demand is currently at 8.1m sq ft of requirements for Central London and City, which is 5% down on the long-term average
Source: Savills
01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0007,000,0008,000,0009,000,000
2000
2001
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2003
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2017
Cit
y t
ak
e-u
p (
sq
ft)
Q1 Q2 Q3
Note 2017 data accurate to end of August
- 1,000,000 2,000,000 3,000,000 4,000,000 5,000,000 6,000,000 7,000,000 8,000,000 9,000,000
10,000,000
Jan-
93A
ug-9
3M
ar-9
4O
ct-9
4M
ay-…
Dec
-95
Jul-9
6Fe
b-97
Sep
-97
Apr
-98
Nov
-98
Jun-
99Ja
n-00
Aug
-00
Mar
-01
Oct
-01
May
-…D
ec-0
2Ju
l-03
Feb-
04S
ep-0
4A
pr-0
5N
ov-0
5Ju
n-06
Jan-
07A
ug-0
7M
ar-0
8O
ct-0
8M
ay-…
Dec
-09
Jul-1
0Fe
b-11
Sep
-11
Apr
-12
Nov
-12
Jun-
13Ja
n-14
Aug
-14
Mar
-15
Oct
-15
May
-…D
ec-1
6Ju
l-17
Sq
Ft
Rolling 12 month total take-up LT Average
City and Tech Belt supply/availability
▪ The City and Tech Belt vacancy rate remains low in historic context at 5.8%
▪ Currently, the 12-month rolling take-up is just 6% less than current supply, compared with the LT avg of being 94% less. To put this into context, the last time the City experienced significant oversupply (2009), take-up was 300% less than total supply, and also reached 555% less at the end of 2003
▪ 2017 - 2019 are expected to see above average levels of development and refurbishment completions, but 39% of the 2017-2020 pipeline is already pre-let. There is a further circa 750,000 sq ft of future space currently under-offer
▪ Furthermore, we still expect some of the schemes anticipated for 2019 and beyond will be delayed and pushed back
Source: Savills
0%2%4%6%8%10%12%14%16%18%
02468
10121416
Va
ca
nc
y R
ate
Mil
lio
n s
qft
Grade A Grade B V Rate
Note 2017 data accurate to end of August
0
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n s
qft
Complete Speculative completion
-600%-500%-400%-300%-200%-100%
0%100%
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% d
iffe
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% diff between rolling take-up and supply LT Avg
City and Tech Belt rental trends
Source: Savills
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Av
era
ge R
en
t (£
/sq
ft)
Average Grade A Rent Average Grade B Rent▪ Headline rents on Prime and Grade A property in the City and Tech Belt have slightly fallen – the average grade A rent for Q3 2017 so far is £60.21/sq ft
▪ With that being said, 48% of the known rents so far this year have been over £60.00/sq ft
▪ The average rent-free period on a straight 10 year lease in Q3 2017 so far is 25 months
▪ The average prime rent for Q3 so far is £71.00/sq ft, down on last year by 7%
£0.00
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£120.00
Q1/
00Q
1/01
Q1/
02Q
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Q1/
04Q
1/05
Q1/
06Q
1/07
Q1/
08Q
1/09
Q1/
10Q
1/11
Q1/
12Q
1/13
Q1/
14Q
1/15
Q1/
16Q
1/17
Ren
t (£
/sq
ft)
City average prime City top rent
0%
20%
40%
60%
80%
100%
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Nu
mb
er
of
deals
0-£19.99 £20-£29.99 £30-£39.99 £40-£49.99
£50-£59.99 £60-£69.99 >£70
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