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Development pipeline by letting status, >100,000 sq ft

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

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

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

2

4

6

8

10

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

Mil

lio

n s

qft

Complete Speculative completion

-600%-500%-400%-300%-200%-100%

0%100%

Q1/

01Q

4/01

Q3/

02Q

2/03

Q1/

04Q

4/04

Q3/

05Q

2/06

Q1/

07Q

4/07

Q3/

08Q

2/09

Q1/

10Q

4/10

Q3/

11Q

2/12

Q1/

13Q

4/13

Q3/

14Q

2/15

Q1/

16Q

4/16

Q3/

17

% d

iffe

ren

ce

% diff between rolling take-up and supply LT Avg

City and Tech Belt rental trends

Source: Savills

£0.00

£10.00

£20.00

£30.00

£40.00

£50.00

£60.00

£70.00

01/2

…01

/2…

01/2

…01

/2…

01/2

…01

/2…

01/2

…01

/2…

01/2

…01

/2…

01/2

…01

/2…

01/2

…01

/2…

01/2

…01

/2…

01/2

…01

/2…

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

£20.00

£40.00

£60.00

£80.00

£100.00

£120.00

Q1/

00Q

1/01

Q1/

02Q

1/03

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