Central London office market report Q1 2020 - JLL
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Central London Office Market Report Q1 2020 1 Central London office market report Q1 2020
2 Central London Office Market Report Q1 2020 Central London Office Market Report Q1 2020 3
Issue to watch - COVID-19 pandemic
The COVID-19 pandemic has created a material The UK economy has effectively been placed in suspended volume of speculative development currently underway. the GFC and reach over 9% by the end of 2021, supply will
uncertainty in real estate market performance. animation until normality can resume, with the government At the start of the GFC in Q2 2008, there was 12.6 million sq ft need to increase from today’s level of 10.1 million sq ft to
taking dramatic steps to ensure that businesses don’t go of speculative space under construction, compared to just over 21 million sq ft.
Across Europe, there is considerable variation in the bankrupt, people don’t lose the ability to contribute to society 7.0 million sq ft today.
extent of the human tragedy implications unfolding and and individuals don’t lose their livelihoods or their homes. How occupiers respond will depend upon the speed and
its impact on economic activity, including the trajectory, Construction is one area where we are seeing short term shape of the recovery - whether we see a short bounce-back,
Sentiment has plummeted in the wake of COVID-19, with the disruption, with many office developments and internal fit-out which is likely to see a quicker return to business as usual or
duration and extent of these impacts on all real estate
IHS Markit/CIPS UK Services PMI falling to just 34.5 in March, projects already incurring delays. Disruption to the supply a more prolonged economic downturn which is more likely
sectors. With varying policy responses across the region which is the lowest level on record and was also the fastest chain and a decrease in available workforce will continue for to lead to job losses, with a consequential release of sublease
and the mitigating implications differing by market and ever monthly fall (decreasing from 53.2 in February). the foreseeable future. In Central London, many construction space. Longer-term, COVID-19 will no doubt force many
sector, it is too early for us to provide a quantitative This and other poor confidence measures have filtered firms are self-regulating and suspending some or all of their companies into considering how they occupy office space,
and robust assessment of value impact on 31st March, through to economic forecasts, with the UK, in line with all schemes. While at this stage it is too early to say what impact with issues such as flexibility, densification and employee
our survey date. global economies, expected to see a sharp fall in economic this will have on individual scheme completion dates, we health and well-being positioned front and centre of any
activity during 2020. expect the pipeline to be pushed out by 1-3 months. Given the future real estate strategy.
In this context, the JLL Q1 2020 real estate performance low vacancy rates, any delay to office completions will add to
indices have been held at Q4 2019 values, except where How the office market responds remains to be seen and the pressure on supply, and support rents if the slowdown is There are many questions that we cannot definitively answer
there has been sufficient evidence at sector and market will be influenced by the severity and length of any economic short-lived. yet and all will have significant real estate implications.
level to make appropriate any reliable adjustments downturn. At this stage, we can look back to previous Human, economic and business impacts are inevitable,
recessions to provide some guidance as to how markets In previous downturns, the volume of tenant-led supply but new measures, policies and procedures, and investing
to figures.
have behaved to try to put today’s market into context. being returned to the market had a material impact on in the right infrastructure, will help mitigate risk in the short
We will talk to the evolution of the market throughout vacancy rates and rental values. In 2008/9, the volume of and longer-term.
We know that in previous downturns, most notably the second-hand space doubled to 14.7 million sq ft in 18 months
Q1 in our reporting and will be continually monitoring early 1990’s recession and the global financial crisis (GFC), We will continue to monitor the situation on the ground and
resulting in a peak vacancy rate of 9.1%. But contrast 2008
market movements as the situation evolves to inform vacancy rates increased sharply due to a combination of will provide updates on new and emerging trends as this
with today, where corporates have a greater emphasis on
our ongoing view of pricing. We will be updating our slower leasing activity and high volumes of speculative utilisation and densification of space which has driven situation evolves.
forecasts, albeit these will be directional at this time, development underway at the entry point. It is interesting efficiencies and resulted in limited excess space in portfolios.
broadly reflecting any meaningful changes to the to note that the current Central London vacancy rate is similar For vacancy rates to follow the same trajectory recorded in
underlying fundamentals. to the entry point of the GFC, but what is different is the
Impact of previous economic downturns on Central London office market supply and demand Office markets: immediate impact
Early 1990s recession Financial crisis EU referendum COVID-19
35
30
25
Million sq ft
20 Construction delays Stalled projects and
reduced cap-ex
15
10
5
0
2020*
2021*
2022*
1984
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
New supply Second-hand supply Speculative development Take-up
Work-from-home initiatives Social distancing, expanded remote
work and more sq ft per person
2020-2022 speculative development includes schemes under construction as at March 2020 and reduced by year of completion.
*2020-2022 supply forecasts as at February 2020 and for indicative purposes only.4 Central London Office Market Report Q1 2020 Central London Office Market Report Q1 2020 5
Central London overview
Leasing activity slows Flex share of take-up Central London vacancy rates A number of significant transactions went under offer during
Across Central London there was just 1.7 million sq ft the COVID-19 outbreak but these may take longer to sign,
9.0%
of take-up in Q1, the slowest start to the year since 2011. or indeed may be withdrawn, though it remains to be seen
Volumes were down 22% on the Q1 10-year average
28% 29% 28% 3% 8.0%
if there has been any material impact on pricing terms.
7.0%
(2.2 million sq ft) and were 25% below the same period in Prime yields in the City moved in 25 basis points to 4.0%
6.0%
2019. The downturn in leasing cannot be directly attributed across all lot sizes in February prior to the COVID-19 crisis and
5.0%
to COVID-19, given that most of the quarter was functioning remained unchanged for the end of the quarter, while West End
under normal circumstances. 4.0%
Q2 2017 Q4 2017 Q3 2019 Q1 2020 yields were held at 3.5%.
3.0%
Despite the West End, City and East London all seeing 2.0% Prime rents have been held stable for the quarter at £75.00 per
16%
quarter-on-quarter declines in leasing volumes, the City 1.0% sq ft for the City and £117.50 per sq ft for the West End.
started the year some 23% ahead of Q1 2019. This was
primarily due to Linklaters pre-leasing 307,000 sq ft at 20 5-year quarterly average 0.0%
Ropemaker Street, EC2. As a result of this transaction and a 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Central London investment volumes
few other pre-let deals, pre-leasing remained a key driver of
Overall vacancy New vacancy 5.0 90%
activity, accounting for 27% of quarterly volumes.
On a more positive note, under offers rose by 30% 10-year average - overall 10-year average - new 4.5 80%
quarter-on-quarter, to 3.2 million sq ft at the end of Q1. 4.0 70%
Central London take-up activity Of this, just under 1.8 million sq ft was under offer on pre-let 3.5 60%
stock. Active demand also remained high at 9.9 million sq ft, Pause in investment activity 3.0
12.0 50%
of which over half is structural and driven by a lease event.
£ billion
2.5
Nevertheless, given the current unprecedented circumstances, Despite a strong start to the year, COVID-19 has disrupted the 40%
10.0 2.0
many of these under offer transactions may take longer to investment market, with a number of sales stalling over the last 30%
1.5
few weeks. Overall in Q1, investment volumes were subdued,
Million sq ft
8.0 complete than usual and some active demand may be deferred 1.0 20%
or aborted as the true extent of COVID-19 becomes clear. totalling just £2.3 billion which was 19% below the Q1 10-year
0.5 10%
6.0 average. Nevertheless, Q1 volumes were in line with quarterly
0.0 0%
Supply remains low volumes recorded during most of 2019, when the first three
4.0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
quarters averaged circa £2.5 billion before the market saw a Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1 Q1
There was a marginal uptick in the vacancy rate to 4.3%, temporary resurgence in Q4.
2.0 up from 4.1% at the end of 2019. This upturn was evident UK Overseas
across all three major markets, but both the City and West End There were seven transactions in excess of £100 million in Q1, 10-year Q1 average Overseas as % of total
0.0
remain characterised by sub-4.0% vacancy while East London and these accounted for 60% of all volumes. The largest deal
2016 2017 2018 2019 2020
saw vacancy rates in excess of 11% by quarter end. The new completed was L&G’s purchase of Sanctuary Buildings, 16-20
Q1 Q2 Under offer vacancy rate was stable at just 0.7%, with both the City and Great Smith Street, SW1 for £300 million.
Q3 Q4 Q1 average 2011-2020 West End recording a new vacancy rate of below 0.5%.
Global headwinds have seen international investors,
Looking forward, speculative space under construction particularly from Asia, behave more cautiously, and during
There were few larger transactions this quarter, which goes reached 6.9 million sq ft, which was a 6% increase over the Q1, overseas investors were responsible for 62% of volumes.
some way to explain the contraction in leasing activity, with quarter. While a number of schemes started on site early in Nevertheless, five of the seven largest transactions were sold
just six deals signed in excess of 25,000 sq ft, compared to a Q1 the quarter, totalling just under 1 million sq ft, the volume to international investors, with German investors most active.
5-year average of 18 deals. The other factor that contributed to of speculative completions was at a historical low. Many In total, German capital accounted for 20% of investment
the low volumes was a significant decline in activity from the construction firms are temporarily halting work on sites across during Q1.
flexible workplace sector, which accounted for just Central London. Given that new vacancy is currently low,
3% of volumes (53,000 sq ft). This was sharply down on the any delay to office development completions will add to this
five-year quarterly average leasing share of 16%. pressure on supply.6 Central London Office Market Report Q1 2020 Central London Office Market Report Q1 2020 7
Key transactions
1 New Oxford After an extensive London wide search, Sanctuary JLL were delighted to execute the The Bailey, 16 IPG Mediabrands wanted to 7-10 Waterloo JLL successfully completed the off-
Street, WC1 JLL advised Credit Karma UK on their Buildings, SW1 sale of this asset for a significant Old Bailey, EC4 accommodate their long-term Place, SW1 market sale of the prime long leasehold
acquisition of a new London HQ at profit, having acted on behalf of Hana headcount growth whilst retaining interest at 7-10 Waterloo Place, SW1,
Tenant: 1 New Oxford Street, WC1. Having Price: Alternative in the purchase less than 12 Tenant: the look and feel of being in their own Price: on behalf of Barings Real Estate
Credit Karma considered both managed and £300.00 million months prior. The opportunity received IPG & Knotel self-contained building. Knotel were £71.00 million at a market leading price. Barings’
traditional office solutions, moving into broad interest from across the globe, brought in to partner with them and, comprehensive refurbishment and
Size: the fitted first floor suite, on a sublease, Purchaser: including Asia and the Middle East. Long Size: on their behalf, JLL acquired the whole Purchaser: reconfiguration created a ‘best in
11,473 sq ft provided flexibility to account for Legal & General income of this nature is increasingly hard 85,573 sq ft of The Bailey, enabling IPG Mediabrands Cara Real Estate class’ mixed-use building with an
Credit Karma’s ambitious growth plans. to secure and, with a 350bps margin over to expand into the building as required abundance of period features. JLL
Rent: Rent:
The building is well-connected sitting treasury gilts, it proved attractive to the over time. This is the first time this deal have been involved with this asset
Confidential Confidential
between Tottenham Court Road and market. Legal & General were ultimately structure has been agreed on this scale throughout its transformation, advising
Holborn tube stations. successful and add the building to their in London, a combination of traditional on the purchase in 2015 and executing
ever-growing portfolio of government lease and partnering structure. a successful leasing campaign at rents
tenanted assets. A highly successful ahead of expectations.
project with multiple JLL service lines
involved, including Debt Advisory.
Ed Smith Rob Corbett Tom Curry James Buckey
Senior Surveyor, Head of West End Director, Tenant Director, West End
Office Agency Investment Representation Capital Markets8 Central London Office Market Report Q1 2020 Central London Office Market Report Q1 2020 9
West End overview
Subdued take-up West End pre-leasing Vacancy increases slightly Prime rents unchanged in Q1
Take-up volumes were subdued in the first quarter of the year, 1.6 45% Supply increased by 10% to 3.5 million sq ft due to a rise Prime rents in all submarkets have been held stable, with the
reaching just 522,000 sq ft, below the 10-year quarterly average in second-hand space brought to market. As a result, rents in the core at £117.50 per sq ft (assuming a 10,000 sq ft floor
1.4 40%
of 901,000 sq ft. Take-up has been falling for the past four the vacancy rate rose to 3.7% but remains below the 10-year plate and a 10-year term).
quarters and is now at its lowest level since Q2 2012. 1.2 35% average of 4.0%. New supply also remained scarce with the
new build vacancy rate standing at 0.4%, below the 10-year
1.0
30% Investment volumes subdued in Q1
West End Q1 take-up 25%
average of 0.8%.
Million sq ft
0.8 Investment volumes reached £1.1 billion across 15 transactions
1.4 20% West End vacancy rates in Q1, below the 10-year quarterly average of £1.4 billion but
0.6 above the figures reached during the first quarter of the past
15%
1.2
0.4 8.0% two years.
10%
1.0 7.0%
0.2
Million sq ft
5%
0.8 6.0%
West End investment volumes
0.0 0%
0.6 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 5.0%
Q1 £0.7 billion
0.4 Under construction Off-site Share of overall take-up 4.0% £1.0 billion Q1 2019
0.2
3.0%
Q1 2018
£1.4 billion
2.0% 10-year
0.0 Active demand reached 3.6 million sq ft and was above the
10-year average of 3.3 million sq ft. The TMT sector was the 1.0%
£1.1 billion
quarterly
Q1 Q1 Q1 Q1 Q1
most active, accounting for 30% of floorspace required. 0.0% Q1 2020 average
2016 2017 2018 2019 2020
This was followed by the banking & finance sector at 27%. 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Take-up 10-year average
Overall vacancy New vacancy
The TMT sector leased the most space and accounted for West End active demand by sector 10-year average - overall 10-year average - new
40% of take-up. This was followed by the services industry UK investors were the largest source of capital, accounting for
and banking & finance, which had shares of 20% each. Speculative development completions amounted to 67% of volumes across 11 deals. The largest asset bought by
6% 65,250 sq ft. Given that this is significantly below the 10-year a UK investor was Sanctuary Buildings, SW1. The building was
Pre-leasing activity was muted during the quarter, accounting 6% quarterly average of speculative completions (210,170 sq ft), sold to Legal & General for £300 million in January and this was
for just 7% of take-up compared to the 10-year quarterly it will do little to alleviate the tight supply conditions. also the largest transaction of the quarter. Investors from the
average of 25%. There was one pre-let deal during the quarter 6% 30% USA, Germany, Switzerland and Lebanon were also involved
in which Google acquired 34,000 sq ft at Q1 Handyside Street in Development completions in 2020 are expected to total
in purchases across the West End.
King’s Cross in February. 2.1 million sq ft, but with 73% of this space already pre-let,
9%
it is likely that very little new supply will reach the market
There was little activity in the flexible workplace sector, this year. The future pipeline is also becoming more limited
with flex accounting for just 3% of take-up in a single deal with 40% of the 2021 pipeline and 21% of the 2022 pipeline
compared to the 5-year average of 17%. The flexible workplace 16% already pre-let. It is too early to say what the impact of 67%
sector has boosted take-up in the West End over the past COVID-19 related construction delays will have on individual UK
27%
few years, although it is too early to say whether the Q1 data scheme completion dates.
23%
represents the start of a slowdown in the sector or is just
an anomaly. West End development pipeline Investment USA
The level of under offers stood at 917,000 sq ft, above the 73% pre-let 21% pre-let volumes 7%
TMT Manufacturing
10-year average of 700,475 sq ft. These transactions may take Banking and finance Professional services
by purchaser Germany
longer to conclude than normal in the current circumstances. 2%
Flex workspace Public administration nationality
2020 2021 2022 2023 Switzerland
Services industry excluding flex
Q1 2020
1%
Lebanon
40% pre-let 3% pre-let10 Central London Office Market Report Q1 2020 Central London Office Market Report Q1 2020 11
City overview
Take-up broadly in line with Q1 average While both under offers and active requirements are ahead Highest quarterly development starts for totalling £100 million, with half of this total accounted for
Take-up totalled 1.1 million sq ft, 26% lower than the 10-year of average, this is unlikely to translate into a strong second three years by Rockwell’s purchase of the Salvation Army site at 101
quarterly average of 1.5 million sq ft, but 23% ahead of the first quarter due to the COVID-19 crisis. We expect transactions to Newington Causeway, SE1 for £50 million, reflecting a capital
take longer to conclude than in normal circumstances, and Premier Place, EC2 was the only development completion, value of £550 per sq ft.
quarter in 2019 when take-up reached 893,000 sq ft. Professional although the entire 200,000 sq ft has been pre-leased to
services occupiers were most active, leasing a total of 520,000 slower decision making for active requirements, with many
now temporarily on hold. Jane Street Capital (142,000 sq ft) and Squire Patton Boggs Prime yields moved in 25 basis points to 4.00% across all lot
sq ft in 16 transactions, more than double any other business (58,000 sq ft). Development starts reached their highest sizes in February, prior to the COVID-19 crisis, and remained
sector. Linklaters’ pre-let of 307,000 sq ft at 20 Ropemaker Street, total since Q4 2016, with development underway on nine
City active demand by sector unchanged for the end of the quarter.
EC2 in February accounted for a major share of this total. schemes totalling 1.3 million sq ft, including 20 Ropemaker
Street, EC2 (398,000 sq ft), which is scheduled to complete in City investment turnover
The TMT sector leased a further 202,000 sq ft in 13 transactions, 1%
4% 2023, and the refurbishment of 2 Gresham Street, EC2 due
including 86,000 sq ft acquired by IPG at The Bailey, EC4, £3.5
for completion in 2021. The higher level of development
also completing in February. In a reversal of a recent trend, 7%
starts underpinned an 8% quarterly increase in the level £3.0
the level of demand from flexible workspace providers slowed,
7% of speculative development underway to 4.5 million sq ft. £2.5
with take-up reaching 37,000 sq ft, representing just 3% of
quarterly take-up, compared to 26% in Q1 2019. The level of 38%
£ billion
£2.0
under offers increased 36% to 2.1 million sq ft and is now
City development starts £1.5
55% ahead of the 10-year average of 1.4 million sq ft.
£1.0
19%
£0.5
City Q1 take-up
1.4
£0.0
1.6 Q1 Q2 Q3 Q4 Q1
1.2
23% 2019 2020
1.4 1.0
1.2
Million sq ft
0.8
1.0 TMT Manufacturing 0.6 36%
Million sq ft
Banking and finance Professional services
0.8 0.4 Germany
Flex workspace Public administration
0.6 Services industry excluding flex
0.2
18%
0.4 0.0 Greece
Q2 Q3 Q4 Q1
0.2 Uptick in vacancy but remains close to record low 2019 2020 14%
The vacancy rate increased to 3.5%, from a record low of 3.3%, Development starts 5-year average UK
0.0
Q1 Q1 Q1 Q1 Q1 but remains significantly lower than both the 10-year average
of 5.6%, and 5-year average of 4.2%. Supply of new build space Prime rents stable 9%
2016 2017 2018 2019 2020 Switzerland
Investment
remains restricted with 457,000 sq ft immediately available, Prime rents and incentives have been held at £75.00 per sq ft,
Take-up 10-year average reflecting a vacancy rate of 0.4%, its lowest level since 2007. with 24 months’ rent free on an assumed 10-year lease. 7%
Legal sector underpinning demand City vacancy rates volumes Qatar
Low investment turnover in Q1
Overall demand increased 5% to 9.6 million sq ft, compared to by purchaser 6%
9.1 million sq ft at the end of 2019. The quarterly increase was Investment volumes totalled £1.1 billion, a fall on the strong
driven by an 11% uptick in active demand, which ended the final quarter of 2019, when turnover reached £3.1 billion, nationality Slovakia
quarter at 7.1 million sq ft, and is now 15% ahead of the 10-year
average. Potential demand fell 10% to 2.5 million sq ft, 25%
3.5% 5.6%
but ahead of the £0.9 billion traded in the equivalent period in
2019. There were three transactions completed in excess
Q1 2020 4%
Q1 2020 China
below the 10-year average, which could be partly attributed of £100 million, accounting for over half of quarterly turnover.
10-year
to requirements activating searches earlier, due to the low average The largest saw a 50% share in Watermark Place, 3%
4.2%
vacancy rate and limited development pipeline. Professional EC4 purchased for £252 million, by Union from Oxford Hong Kong
services accounted for the largest share of active demand at Properties, reflecting a net initial yield of 4.77% and a capital
38%, driven largely by law firms, with 1.9 million sq ft required 5-year value of £938 per sq ft. 2%
from 24 occupiers. average Japan
European (excluding UK) buyers, led by Germany, were most
active, accounting for the six largest transactions totalling 1%
£820 million. There were six transactions involving UK buyers Other12 Central London Office Market Report Q1 2020 Central London Office Market Report Q1 2020 13
East London overview Rental conditions in Central London
Subdued leasing activity East London vacancy rates 1 Hammersmith 4 Mayfair 7 Victoria 10 St James’s 13 Fitzrovia
£58.00 £117.50 £80.00 £117.50 £90.00
Take-up was subdued in the first quarter, reaching 14%
£88.32 £177.49 £119.13 £177.49 £132.61
75,000 sq ft. This was 72% lower than the 10-year quarterly
12%
average, albeit take-up is typically more volatile than the
Kensington Belgravia & 8 Vauxhall 11 Soho North of
City and West End markets. All four of the quarter’s 10% 2
& Chelsea
5
Knightsbridge
14
Oxford Street
£60.00 £95.00
transactions involved tenants from the public administration £72.50 £82.50 £90.00
8% £86.38 £142.25
and institutions sector, including 32,500 sq ft leased by £118.59 £133.64 £138.40
Finsbury
Anglia Ruskin University at Import Building, E14. 6% Park
3 Paddington 6 Battersea 9 Waterloo 12 Covent Garden 15 Marylebone
4%
East London Q1 take-up £75.00 £57.50 £65.00 £85.00 £72.50
2% £109.56 £82.73 £90.34 £124.13 £105.84
0.4 0%
Hampstead
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Prime rent Heath Stratford
0.3 £100+ 30
Overall vacancy New vacancy
Million sq ft
£90-99
10-year average - overall 10-year average - new £80-89
Camden
0.2 £70-79 18 King’s Queen Elizabeth
Victoria Olympic Park
£60-69 Cross Park
19
£50-59
0.1 Three-tiered rental market Sub £50 The Regent’s
Park
Marylebone
Canary Wharf, the benchmark for East London, remains a e Euston
15 16 Clerkenwell Shoreditch
three-tiered rental market. Prime rents were held at £51.00 per Wormwood
Bloomsbury
ry 29
0.0 Scrubs
North of Fitzrovia 17 20 28
Q1 Q1 Q1 Q1 Q1 sq ft. Tenant controlled supply is being marketed at rents from Park
Oxford 14 13
City Northern
Covent Midtown Western
£42.50 per sq ft and continues to restrict rental growth, while Paddington Street
Soho Garden 21 22
Central 25 27
2016 2017 2018 2019 2020 3 23 Southern Aldgate
pre-let supply is being marketed at rents of £59.50 per sq ft. £90-100+ Mayfair
11 12
RIVER THAMES
Eastern
St. James 26
Take-up 10-year average Hyde
Park
4
10 Southbank 24
There were two major investment transactions completed Green
Park
Canary 31
Wharf
in Q1 totalling £168 million, with most of this total accounted Waterloo
0 5 Belgravia &
Robust demand underpinned by wider for by Art-Invest’s purchase of Canada Water Dock, SE16 for Knightsbridge 9
search areas £140 million. Kensington
& Chelsea Victoria
Hammersmith
2 7 Vauxhall
Overall demand remained unchanged at 4.7 million sq ft, 1
8
41% ahead of the 10-year quarterly average of 3.3 million sq ft. East London rental bands
Within this, active demand increased 12% to 3.7 million sq ft, 6
BATTERSEA Greewich
Park
£59.50 per sq ft+
PARK
Battersea
while potential demand fell 28% to 1.0 million sq ft, reflecting a
change in the status of some requirements. The above-average RIVER THAMES
Pre-let
demand reflects the wider search areas of many companies,
with 77% of active requirements also considering options in Clapham
Common
the City or West End.
£51.00 per sq ft
16 Euston 19 King’s Cross 22 Western 25 Central 28 Northern
£75.00 £85.00 £77.50
Brockwell £72.50 £75.00
Above-average supply
Park
Prime rent £114.13 £125.29 £112.25 £108.42 £107.41
Supply increased marginally to 2.4 million sq ft, reflecting a Wimbledon 17 Bloomsbury 20 Clerkenwell 23 Southern 26 Eastern 29 Shoreditch
vacancy rate of 11.1% which is significantly higher than the Common
10-year average of 7.4%, and the City (3.5%) and West End £42.50 per sq ft+ £85.00
£121.82
£80.00
£109.47
£70.00
£104.75
£75.00
£107.41
£72.50
£98.66
(3.7%) markets. Tenant controlled
18 Camden 21 City Midtown 24 Southbank 27 Aldgate 30 Stratford
There were no development starts or completions during
£60.00 £72.50 £70.00 £62.50 £46.50
the quarter. There are two major schemes currently under
£93.80 £109.59 £104.50 £93.29 £67.13
construction speculatively, comprising 20 Water Street,
E14 (215,000 sq ft) and Cargo, North Colonnade, 31 Canary Wharf
E14 (346,000 sq ft), which are both due to complete in Q3 2020.
£51.00
£76.2314 Central London Office Market Report Q1 2020 Contacts Leasing Neil Prime Dan Burn Chris Valentine Head of Central London Markets Head of City Agency Head of West End Agency +44 (0)20 7399 5190 +44 (0)20 7399 5966 +44 (0)20 7087 5362 neil.prime@eu.jll.com dan.burn@eu.jll.com chris.valentine@eu.jll.com Capital Markets Julian Sandbach Rob Jackson Rob Corbett Head of Central London Head of City Head of West End Capital Markets Capital Markets Capital Markets +44 (0)20 7399 5973 +44 (0)20 7399 5029 +44 (0)20 7399 5545 julian.sandbach@eu.jll.com robert.jackson@eu.jll.com rob.corbett@eu.jll.com Research Jon Neale Elaine Rossall James Norton Amy Birdee Head of UK Head of UK Director Associate Director Research Offices Research UK Research UK Research +44 (0)20 7087 5508 +44 (0)20 3147 1666 +44 (0)20 7087 5033 +44 (0)20 7087 5098 jon.neale@eu.jll.com elaine.rossall@eu.jll.com james.norton@eu.jll.com amy.birdee@eu.jll.com Lease Advisory Geoffrey Pentecost Nicholas Smith Director - Lease Advisory Director - Lease Advisory +44 (0)20 7399 5390 +44 (0)20 7087 5762 geoffrey.pentecost@eu.jll.com nicholas.smith@eu.jll.com jll.co.uk/london-office-markets © 2020 Jones Lang LaSalle IP, Inc. All rights reserved. The information contained in this document is proprietary to Jones Lang LaSalle and shall be used solely for the purposes of evaluating this proposal. All such documentation and information remains the property of Jones Lang LaSalle and shall be kept confidential. Reproduction of any part of this document is authorized only to the extent necessary for its evaluation. It is not to be shown to any third party without the prior written authorization of Jones Lang LaSalle. All information contained herein is from sources deemed reliable; however, no representation or warranty is made as to the accuracy thereof.
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