London Offices Market Analysis

Transcription

1 London Offices Market Analysis Issue 1 Jan Mar 28

2 Agent Share by Number of Deals Done - Rank Agent Name No. of Deals City West End 1 DTZ CB Richard Ellis =3 Knight Frank =3 Richard Susskind & Co 24 5 GVA King Sturge =7 Jones Lang LaSalle =7 E A Shaw 18 9 Farebrother 16 =1 BH2 12 =1 Strutt & Parker =12 Godfrey Vaughan 11 =12 Atisreal =14 Cushman & Wakefield 1 =14 NB Real Estate =16 Edward Charles & Partners 9 =16 Pilcher Hershman 9 =18 Ingleby Trice Kennard 8 =18 Newton Perkins 8 =18 Allsop =18 Tuckerman 8 =18 Langham Estate Management 8 =23 MERJS 7 =23 D E & J Levy 7 =23 Robert Irving Burns 7 =23 Dron & Wright =23 Savills This analysis details the top agents by number of deals done, and has been split out to reveal, where applicable, which office, and therefore which market, is more active. Once again, DTZ is leading the table, and it continues to be more active in the West End, although the gap is smaller than it has been previously. Also more active in the West End are GVA and Jones Lang LaSalle. CB Richard Ellis is in second place, with the same amount of deals in the City as DTZ, but half as many in the West End. Third placed Knight Frank is also more active in the City, as are all the other agents in the table, where deals are attributable to a specific office, with the exception of Strutt & Parker which completed six deals in each market. Richard Susskind is the only single office agent to appear in the top five, with 24 deals. Overall, in terms of numbers of deals completed which are attributable to a specific office, the City currently has a slight lead over the West End 11 compared with 93. Top 5 Agents by Deals Done Office Breakdown DTZ GVA Knight Frank 57% 43% 33% 4% 6% 5% 17% CB Richards Ellis King Sturge 34% 6% 42% 58% City West End 6% Docklands 1 For all data enquiries call

3 London Offices Market Analysis Central London Agents Market Share League Table Rank Agent Disposals (sq ft) No Deals Market Share 1 CB Richard Ellis 62, % 2 Knight Frank 42, % 3 DTZ 42, % 4 Atisreal/Morgan Pepper 321, % 5 Jones Lang LaSalle 313, % 6 BH2 248, % 7 King Sturge 228, % 8 Savills 22, % 9 Cushman & Wakefield 28, % 1 Strutt & Parker 175, % 11 GVA 139, % 12 Richard Susskind & Co 88, % 13 Godfrey Vaughan 79, % 14 Thompson Yates 78, % 15 Farebrother 73,3 16 3% 16 Edward Charles & Partners 67,21 9 2% 17 E A Shaw 61, % 18 Ingleby Trice Kennard 48,6 8 2% 19 NB Real Estate 4,85 1 1% 2 Newton Perkins 39,53 8 1% 21 Allsop 34,93 8 1% 22 Smith Melzack Pepper Angliss 25, % 23 MERJS 24, % 24 Tuckerman 23,28 8 1% 25 Pilcher Hershman 22, % Milton Gate, EC1:Addleshaw Goddard takes 172, sq ft CB Richard Ellis regains top spot CBRE regained top spot this quarter, letting over 62, sq ft and taking 22% of the market share. It can largely attribute its position to a strong performance across four of the markets this quarter, obtaining top five finishes in all but the Southern and City fringe, and claiming top spot in Docklands.The largest deal to take place was the 164,93 sq ft letting to Moody s Investors Services at 1 Canada Square, where CBRE acted jointly with Jones Lang LaSalle and Knight Frank.The space was made available after Atisreal and Cherryman successfully negotiated the surrender of Telegraph s lease back to freeholder Canary Wharf Group.This deal undoubtedly helped seal its top place finish, but it was the consistency of letting activity throughout the quarter that led to the 2, sq ft lead CBRE took over second placed Knight Frank which topped the 27 full year market share table. Knight Frank climbed two places on Q4 27 and took 15% of the market share over 24 deals.as with CBRE, it had top five finishes in four of the markets, with the exception of Midtown and Southern fringe. Aside from 1 Canada Square, its largest deal saw Lockton International take a prelet at the 83,98 sq ft St Botolph House, Houndsditch, EC3, joint with Cushman & Wakefield. DTZ slipped to third place, after topping last quarter s league table, completing an impressive 45 deals, more than any other agent. Its largest disposal was in a transaction joint with BH2 at 3 Park Street, SE1, where Hyde Housing Association is planning to take the entire 5,95 sq ft proposed property upon completion in Q3.The performances in the West End and Southern fringe markets ensured another high finish this quarter with the agent taking top spot in both markets. Atisreal boosted by Morgan Pepper acquisition Atisreal clinched fourth spot taking 11% of the market share and completing 321,59 sq ft of lettings.the improved league position is largely attributable to the recent acquisition of City and Midtown market specialist Morgan Pepper, which prior to them joining forces had completed the largest transaction of the quarter at Milton Gate, Chiswell Street, EC1, where 171,8 sq ft was taken by Addleshaw Goddard.This deal enabled them to take joint top place in the City fringe market, alongside Savills, which also advised at Milton Gate. Elsewhere Atisreal advised on the prelet to Mitsui Sumitomo s at the 56, sq ft Willis Building, 51 Lime Street, EC3. Jones Lang LaSalle was pushed into fifth position after completing on 313, sq ft over 18 deals. Other than its joint transaction at One Canada Square, JLL had two top five finishes, in the Docklands and West End markets. Its second largest deal however, was seen in the outer markets, with the British Heart Foundation taking 35,5 sq ft at Greater London House, NW1. BH2 took sixth place seeing top five finishes in both the City core and Southern fringe markets. Its largest deal completed at 15 Aldersgate Street, EC1, where Moore Stephens & Co took 8, sq ft in a deal joint with King Sturge. Elsewhere, 35,5 sq ft was disposed of at Apollo Court, 5 Thomas More Square, E1, to Global Tea & Commodities in a transaction joint with Knight Frank. Other than the letting at 15 Aldersgate Street, EC1, which secured its seventh place, King Sturge was sole agent on the disposal of 55,35 sq ft at Cutlers Exchange 123 Houndsditch, EC3. Savills slipped one place to eighth spot this quarter completing seven deals. Other than the Milton Gate transaction, it advised jointly with DTZ on the 17,9 sq ft letting to Vestra Wealth at 14 Cornhill, EC3, and elsewhere the 11,73 sq ft sole instruction at The Blue Fin, 9 Southwark Street, SE1, where VT Communications took the space on a ten year lease. Cushman & Wakefield climbed five places to ninth spot letting 28,9 sq ft and gaining a 7% market share.two notable deals, other than the letting at St Botolph House, saw Cushman & Wakefield achieve a top five finish in Docklands, with 33,2 sq ft taken by De Vere & Company at 1 Westferry Circus, and 3,1 sq ft taken by CLB Littlejohn Frazer at the same property, both joint with CBRE. Strutt & Parker completes the top ten, gaining 6% of the market share over 12 deals.at the Stock Exchange building, it acted jointly with CBRE, on the 74,8 sq ft prelet to DTZ, and at Iona, 4 Argyll Street,W1, it let 27,6 sq ft, joint with Cushman & Wakefield, to Och Ziff. For all data enquiries call

4 Agents Market Share by Market City Core Rank Agent Disposals (sq ft) No Deals Mkt Share 1 King Sturge 198, % 2 CB Richard Ellis 183, % 3 BH2 172, % 4 Strutt & Parker 15, % 5 Knight Frank 12, % King Sturge took top spot in the City core this quarter, disposing of 199, sq ft across 11 deals, and achieving a 27% market share. Other than the deals already mentioned, one other notable transaction occurred at the London Underwriting Centre, 3 Minster Court EC3, where Catlin Underwriting Agencies took an additional 9,5 sq ft. CB Richard Ellis claimed second place this quarter completing the largest number of deals and taking 25% of the market share. Other than the letting at the Stock Exchange building, almost 29, sq ft was let to Miki Travel at Vintners Place, Upper Thames Street, EC3, in a disposal joint with BH2, which took third place this quarter with a 23% market share over ten deals. Strutt & Parker let a respectable 16, sq ft this quarter and made fourth position with its second largest deal taking place at the Stock Exchange building, where Gide Loyrette Nouel took 22,2 sq ft on the 14th and 15th floors in a disposal joint with CBRE. Knight Frank completed the City core table this quarter taking 14% of the market share. Its inclusion in the table was almost entirely due to the deal at St Botolph House, however it did complete an additional five deals, the most significant of which was at 1 Gresham Street, EC2, where J.C. Flowers & Co took 8, sq ft on part of the fourth floor in a deal joint with Jones Lang LaSalle. Midtown Rank Agent Disposals (sq ft) No Deals Mkt Share 1 Farebrother 62, % 2 Atisreal 34, % 3 DTZ 32, % 4 E A Shaw 29, % 5 CB Richard Ellis 23, % Farebrother climbed four places this quarter in Midtown to claim top spot after completing 13 deals, taking an impressive 29% of the market share.the largest deal to complete was at the Holborn Centre, High Holborn, EC1, where the fourth floor, measuring 19, sq ft, was taken by Michael Page Holdings in a transaction joint with DTZ.Atisreal had a successful quarter in Midtown, achieving second place after completing just three deals, the largest being the 15, sq ft disposal at Grove House, Orange Street,WC2, where Avanta Business Centres took the space, in a deal joint with Richard Susskind and Cluttons. DTZ claimed third spot taking 15% of the market share. Its largest deal to complete other than that at the Holborn Centre, saw Electronic Arts take 6,6 sq ft at Centre Point, 13 New Oxford Street,WC1, joint with Atisreal and EA Shaw, which took fourth spot this quarter completing on 29,7 sq ft.the largest of its nine deals was 1,1 sq ft at 5 Richbell Place,WC1, to an undisclosed occupier. CBRE completes the Midtown table taking fifth spot and 11% of the market share.the largest of its two deals was at Arundel Great Court,WC2, where 12,95 sq ft was taken by an undisclosed occupier through a deal joint with Atisreal. Docklands Rank Agent Disposals (sq ft) No Deals Mkt Share 1 CB Richard Ellis 284, % 2 Knight Frank 176, % 3 Jones Lang LaSalle 164,93 1 5% 4 Cushman & Wakefield 63, % 5 DTZ 24, % CBRE climbed up the table this quarter winning an 87% market share and claiming top spot in Docklands. It completed five deals, with three occurring at One Canada Square, and two at 1 Westferry Circus. Knight Frank achieved second place, seeing 176,85 sq ft complete over three transactions. Other than the deal at One Canada Square, Knight Frank acted on the disposal of 1,3 sq ft at 5 Harbour Exchange Square, where the first floor was let to Cognizant Limited through a deal joint with DTZ. JLL improved by two places on last quarter rising to third spot, seeing only one deal complete, this being the 164,9 sq ft disposal at One Canada Square to Moody s. Cushman & Wakefield claimed fourth place this quarter completing two deals and taking 19% of the market share, with both transactions taking place at 1 Westferry Circus, where a total of 63,3 sq ft was let. DTZ has again made the top five in Docklands with its largest deal occurring at the Isis building, 193 Marsh Wall, where Tawa Management took the 12,8 sq ft first floor. West End Rank Agent Disposals (sq ft) No Deals Mkt Share 1 DTZ 131, % 2 CB Richard Ellis 127, % 3 GVA Saxon Law 81, % 4 Jones Lang LaSalle 8, % 5 Knight Frank 69, % DTZ claimed first place in the West End completing a very impressive 21 deals and taking 19% of the market share. Its largest deal occurred at 1 Curzon Street,W1, where GLG Partners took 3,3 sq ft of additional space. Elsewhere in a sole instruction, almost 3, sq ft was let to Warburg Pincus International at Almack House, SW1. CBRE slipped one place this quarter to second spot and took 18% of the market share. Its largest deal was the transaction joint with JLL at 9 Cavendish Square,W1, where Chevron Texaco UK took the entire 3, sq ft property on a prelet. GVA made the table this quarter taking third spot completing 81, sq ft worth of deals with its largest transaction being at Berkeley Square House,W1, where Regus took 23,2 sq ft of space on the first floor at the property in a deal joint with CBRE. JLL took fourth place again this quarter completing 11 deals and letting a total of 8, sq ft. Other than its joint disposal at 9 Cavendish Square, 18,6 sq ft was let at Great Marlborough Street,W1, where four floors were taken by separate tenants. Knight Frank slipped to fifth place, completing eight deals and taking 1% of the market share.the largest transaction to take place was seen at 25 Victoria Street, SW1, where 18, sq ft was taken through a deal joint with CBRE by First Reserve Corporation. City Fringe Rank Agent Disposals (sq ft) No Deals Mkt Share =1 Atisreal 171, % =1 Savills 171, % 3 Thompson Yates 78, % 4 Knight Frank 64, % 5 Richard Susskind & Co 54, % Top place is shared between Atisreal, following its acquisition of Morgan Pepper, and Savills, with a 38% market share each, after both instructing on the largest deal of the quarter at Milton Gate, Chiswell Street, EC1.Addleshaw Goddard took the space measuring 171,8 sq ft.thompson Yates claimed third spot after successfully negotiating six deals. Four of these took place at Old Truman Brewery, E1, the largest of which was at the H Block where 45,4 sq ft was let to an undisclosed tenant. Knight Frank again managed a top five finish and took fourth place in Midtown,and other than the disposals already mentioned 11,5 sq ft was let to Cunningham Lindsey International at International House, 1 St Katharine s Way, E1, through a deal joint with Ingleby Trice Kennard. Richard Susskind took fifth spot this quarter achieving a 12% market share after acting on 18 disposals. Only one deal of over 1, sq ft completed and this was at 154 Clerkenwell Road, where the entire 13,2 sq ft building was taken by Agent Provocateur. Southern Fringe Rank Agent Disposals (sq ft) No Deals Mkt Share 1 DTZ 76, % 2 BH2 5, % 3 Savills 11, % 4 Edward Symmons 6,4 2 7% 5 E A Shaw 3, % DTZ claimed first place this quarter after finishing second in Q4 27. It disposed of 76,4 sq ft over two deals and took an impressive 8% market share. Other than the letting at 3 Park Street, it disposed of 25,5 sq ft at New City Court, 2 St Thomas Street, where part of the first and entire second floor was taken by Guy's and St Thomas' NHS Foundation Trust. BH2 were second this quarter, completing just one transaction in the joint disposal of 3 Park Street. Savills climbed one place to third, and as with last quarter saw only one deal complete.this was the sole instruction at The Blue Fin building, where VT Communications took 11,7 sq ft on a ten year lease. Edward Symmons completed two disposals this quarter and took 7% of the market share.the largest disposal was at Magdelene House, Tooley Street, where 4, sq ft was let to Planning Potential. E A Shaw saw its second top five finish in the Southern fringe market, with only one deal completing, this was the 3,8 sq ft disposal of the third and fourth floors at St Stephen s House, 115 Southwark Bridge Road, to the Health Management Group. 3 For all data enquiries call

5 London Offices Market Analysis Key Transactions All Markets Market Address Tenant Size (sq ft) Agent City Fringe Milton Gate, Chiswell Street, EC1 Addleshaw Goddard 171,85 Atisreal/Savills Docklands One Canada Square, E14 Moody's Investors Service 164,93 CB Richard Ellis / Jones Lang LaSalle / Knight Frank City Core St Botolph House, Houndsditch, EC3 Lockton International 83,98 Cushman & Wakefield / Knight Frank City Core 15 Aldersgate Street, EC1 Moore Stephens & Co 8, BH2 / Kings Sturge City Core Stock Exchange Building, Old Broad Street, EC2 DTZ 74,72 CB Richard Ellis / Strutt & Parker City Core The Willis Building, Lime Street, EC3 Mitsui Sumitomo Insurance 56,2 Atisreal Southern Fringe 3 Park Street, SE1 Hyde Housing Association 5,95 BH2 / DTZ City Fringe Apollo Court,Thomas More Square, E1 Global Tea & Commodities 35,46 Savills Docklands 1 Westferry Circus, E14 De Vere & Company 33,25 CB Richard Ellis / Cushman & Wakefield West End Victoria Central, Buckingham Palace Road, SW1 Abbey Business Centres 3,93 Atisreal / Godfrey Vaughan West End 1 Curzon Street, W1 GLG Partners 3,34 DTZ West End 9 Cavendish Square, W1 Chevron Texaco 3,8 CB Richard Ellis / Jones Lang LaSalle Southern Fringe New City Court, St Thomas Street, SE1 Guy's & St Thomas' NHS Foundation Trust 25,48 DTZ Midtown Holborn Centre, Holborn, EC1 Michael Page Holdings 18,98 DTZ / Farebrother Midtown Grove House, Orange Street, WC2 Avanta Business Centres 14,98 Atisreal / Cluttons / Richard Susskind Key New Instructions All Markets Market Address Grade Size (sq ft) Agent Midtown 33 Holborn, EC1 Secondhand 33, Cushman & Wakefield / Jones Lang LaSalle West End 1 Drummond Gate, SW1 Secondhand 16,9 DTZ West End Fortress House, Savile Row, W1 Under Construction 91,51 CB Richard Ellis / DTZ City Core 1 Lime Street, EC3 Premarketing 53,48 GVA / Kinney Green Docklands 1 Upper Bank Street, E14 Secondhand 53,44 CB Richard Ellis / GVA West End Walmar House, Regent Street, W1 Premarketing 52,5 Savills Docklands 25 Bank Street, E14 Secondhand 4,3 Ingleby Trice Kennard City Fringe 21 Prescot Street, E1 Secondhand 38,5 Jones Lang LaSalle Midtown 5 New Street Square, EC4 Under Construction 36,33 Savills Docklands 1 Churchill Place, E14 Secondhand 33,1 Atisreal City Core Fitzwilliam House, St Mary Axe Secondhand 3,22 King Sturge City Core 11 Devonshire Square Secondhand 27,71 CB Richard Ellis City Fringe Sutton House, Great Sutton Street, EC1 Under Construction 26,93 Anton Page / Stirling Ackroyd City Core 21 Bishopsgate, EC2 Under Construction 26,73 Jones Lang LaSalle / Knight Frank West End 1-11 Hay Hill, W1 Premarketing 26, GVA / Knight Frank For all data enquiries call

6 Summary Statistics City Core City Fringe Docklands Midtown Southern Fringe West End Overall Q1 Q1 Q1 Q1 Q1 Q1 Q1 Takeup (million sq ft) annual or quarter total New/Refurb existing Premarketing Secondhand Under Construction Total Availability (million sq ft) annual quarterly average or quarter end Q1 Q1 Q1 Q1 Q1 Q1 Q1 New/Refurb existing Premarketing Secondhand Under Construction Total Availability Rate % annual average or quarter Q1 Q1 Q1 Q1 Q1 Q1 Q1 % 8.89% 6.21% 6.45% 14.61% 11.% 9.3% 8.44% 5.54% 4.46% 6.63% 5.13% 6.46% 5.95% 3.65% 4.91% 6.7% 4.15% 4.51% 8.43% 5.95% 6.2% Under Offer and Withdrawn (million sq ft) quarter or quarterly average Q1 Q1 Q1 Q1 Q1 Q1 Q1 Under offer Withdrawn Average Asking prices ( psf) quarter or quarterly average *New leases only Q1 Q1 Q1 Q1 Q1 Q1 Q1 New Build Existing Second-hand Grade A Investment Sales (million sq ft) Annual or quarter total Q1 Q1 Q1 Q1 Q1 Q1 Q1 Total sq ft No Transactions Construction Starts (million sq ft) Annual or quarter total Q1 Q1 Q1 Q1 Q1 Q1 Q1 Total started Pre-let Speculative Completed Space Still available (million sq ft) (completion by full year or part of year) Q1 Q1 Q1 Q1 Q1 Q1 Q1 Total completed Still available Future Completions (million sq ft) for full year or part of year Delivery date Total to complete Amount still available % still available 81% 97% 6% 1% 1% % 26% 37% 1% 78% 84% % % % % 49% 95% % 66% 79% 43% 5 For all data enquiries call

7 Overview London Offices Market Analysis Introduction After the poor end to 27, with the credit crisis starting to take its toll on market activity and concerns over debt structures spiralling, it was always going to be a cautious start to the year ahead.with a large development pipeline established, 8.7 million sq ft is set to complete this year alone, subdued letting activity could not have come at a worse time. Of the stock due to complete, 65% is currently available. Last quarter saw companies showing negative returns and the IPD index indicated the worst return on property investment since the 199 s crash, comparisons to which were already being made. There is no doubt that the market is suffering from the fallout in the sub prime credit markets, with take up as a whole declining by 2.5% on the already low levels of last quarter. Only three markets showed improvements in activity, the City core, City fringe,and Docklands. However, the amount of space taken in the City core is still incredibly low. Market confidence has been poor and deals have been few and far between. Overall, supply levels have yet to reveal the severity of the current slump, as little space has completed this quarter, the exception being the West End market.the impact of low market activity will unfold as 28 progresses as a flood of vacant stock completes across London and is released to the market.this in turn will suppress rental growth and cause availability rates to slacken. A divide in fortunes is evolving between the City and West End. Understandably, the City is suffering the brunt of the change in financial occupier demand and the West End is taking comfort from the much needed injection of newly completed stock. Investment prices are being restructured so opportunities are there for investors with access to capital. Investment: Can re-pricing of assets turn the corner on stifled investment activity? However, for Q1 at least, investment activity as a whole was restrained with only 41 deals completing.the deals which have completed have tended to be at cut prices as space is perceived to be overpriced and transactions of high risk.the fall in capital values has inevitably resulted in rising yields, which has improved capital income for those relying on rent returns. However, with capital values falling by as much as 15%, short term gains are poor with investors having to secure funding against lower value portfolios. Those investors reducing their exposure to the UK market are focussing attentions on overseas ventures, where market conditions are more stable and short term prospects more risk averse.this, coupled with the UK losing ground in the competitiveness of its corporation tax rate, has undoubtedly damaged London s investment appeal. According to a survey carried out by PricewaterhouseCoopers and the Urban Land Institute, the Capital has slipped to 15th place in investment popularity, down from 2nd place in 26.This fall was seen last quarter where Irish investment in London dropped to 4.7 billion, down by 15% on 26, interrupting three consecutive years of spending growth. Several large companies have decided to vacate the UK to foreign offices, including internet search engine Yahoo, which plans to re-locate to Geneva. The fall in capital values is addressing this, and are beginning to attract other sources of foreign investment, particularly from the Middle East, China and Dubai, where their petrol dollars are now likely to posses greater purchasing power.this quarter the 13 million Metropole Building, Northumberland Avenue,WC2, was purchased by Istithmar, the Dubai investment fund. It is not only foreign investors ready to take advantage in adjustment in capital values. UK opportunity funds that have sufficient capital to invest are also being tempted by the lower pricing of available stock. Helical Bar Investments has stated that the re-pricing of assets has renewed its interest in a market it was previously priced out of. Adjustments are slowing and some have claimed that the bottom has been reached, after the sale of New Star UK Property Unit Trust s 6 Gracechurch Street, EC3, was sold to Evans Randall for just million after it was placed on the market for 145 million. Activity stalls This quarter has seen take up stall.although the City core saw a slight increase in take up on Q4 27, it is obviously heavily reliant on financial occupiers. Recent news of the collapse of global investment bank Bear Stearns, and losses published by Citibank and Merrill Lynch, is not a good sign.questions are now being asked over occupier demand and its ability to absorb the vacant stock completing in 28. Consequently starts have now been pushed back, as developers strive to achieve substantial prelets.the prospect of cut backs at many City banks has also led to large requirements being postponed. Both Macquarie and Investec are delaying expansion and an estimated 3, sq ft requirement has been put back until a later date. Many corporations have opted for flexible space on short terms until the market stabilises, resulting in a strengthening serviced office sector. Asking rents for new build stock have been affected by this, and have therefore began to increase at a slower rate. The West End has fared better this quarter, despite seeing take up levels fall by 22%.A much needed supply of new stock completed, 84% of which has already been prelet.this will ensure that the market will not be swamped by vacant stock and availability rates remain contained. Unlike the City core, the West End appears to have a stable development pipeline, and due to its multi-occupier market, the effects of the credit issues have been softened. Outlook for 28 The effects of the credit crisis are being uncovered and they appear to be rather deep rooted.the economic downturn at the end of 27 has continued into 28. Occupier demand is tenuous, developers are unsure of the future, and the pricing of assets is subject to review. With current volumes of activity both for take up and investment sales being low, coupled with a growing speculative development pipeline, the outlook for the remainder of 28 is concerning.activity for the forthcoming quarters is expected to be even slower, and is likely to be dependant on two things: when the debt market begins to improve, and how much impact there will be on the occupier market. The West End is expected to see increased asking rents as more new stock completes and occupier demand remains high. In contrast, if levels of activity do not increase it is likely that City rents could stall or possibly fall as the large supply of new space completes, exceeding the current demand. The employment market is showing signs of suffering, with the financial services industry being hit the hardest. Cut backs of between 1, and 2, employees are expected as many investment banks release poor results. It has been reported that the continuing credit crunch has led to the financial services sector reducing its spending on land and buildings to the lowest level since June The outlook for 28 appears fairly gloomy, for the City especially. Despite this, it is important to remember that the property market is cyclical. Re-pricing of assets began to show signs of slowing in February and although capital values have fallen, rents as a whole have remained stable.the London office market is also a consistent performer and during the current economic downturn has once again outperformed returns seen in other markets. Metropole Building,WC2: Sold for 13m 2 Fenchurch Street, EC3: Construction start may be pushed back For all data enquiries call

8 City Core % +/- % +/- % +/- Take up (sq ft) 24 months 12 months 3 months New/Refurb existing 14, Premarketing - n/a n/a n/a Secondhand 494, Under Construction 229, n/a Total 738, Take Up The disappointing take up figures in the City core seen at the end of 27 have continued in to with levels of activity rising by only 3%.Take up of new or refurbished space was down by 74% on last quarter with only three deals completing.as with Q4 27, no pre marketed space was taken this quarter, however, take up of stock under construction is up by 18% with five deals completing. The most significant deal to take place this quarter was the 83,98 sq ft prelet to insurance broker Lockton International on the first and second floors at St Botolph House, EC3.The property is currently under construction and due for completion in 29. Elsewhere DTZ took 74,7 sq ft at The Stock Exchange building, 125 Old Broad Street, EC3, on a 2 year lease. Take up of secondhand stock rose slightly this quarter with two notable deals completing.the largest saw Moore Stephens & Co take the entire 8, sq ft at 15 Aldersgate Street, EC1, on an assignment from Addleshaw Goddard, it plans to take occupation of the space later this year when Addleshaw Goddard moves to Milton Gate. Secondly, Mitsui Sumitomo Insurance took 56,2 sq ft at the Willis Building, 51 Lime Street, EC3, and plans to take occupation in May 28 when the Willis Group is planning to vacate to other existing London offices, including some additional space at the same building. The disappointing levels of activity have not affected the volume of space placed under offer this quarter, a total of 1.29 million sq ft. The largest amount of space to gain interest was at St Alphage House, 2 Fore Street, EC2, where the entire proposed one million sq ft development recently went under offer to JP Morgan, a deal which would provide a much needed boost to take up levels should it complete. A sense of stability and renewed interest appears to be required if the City core is to avoid falling into a slump, however this may be a long way off for this market which seems to be feeling the brunt of reduced occupier demand caused by the financial uncertainties in the current market conditions. Supply Supply dropped by almost 6% on last quarter, but was still up by 3% on this time last year.this was not a result of improved take up levels for the quarter but largely due to a decreased amount of space being actively premarketed, down by 16% on Q4 27.This reduction largely came in the form of Great Portland Estate s 815, sq ft proposed property at 1 Bishopsgate, EC2, being withdrawn from the market until a date closer to the construction start, which is yet to be determined, although completion is currently scheduled for Q Supply of new or refurbished stock increased slightly % +/- Sq % ft +/- Mkt Shr % +/- this quarter with three schemes totalling 21, sq ft Supply (sq ft) 24 months 12 months 3 months completing compared to 39, sq ft in Q4 27.The largest scheme to complete was British Land s 122,31 New/Refurb existing 246, sq ft development at Ludgate West, EC4, where 37,44 Premarketing 7,343, sq ft remains available and is being actively marketed. Secondhand 3,223, Supply of space under construction has increased this Under Construction 5,944, quarter rising by 3% on Q4 27 and by 7% on this Total 16,758, time last year. In total seven schemes got underway, totalling 685,67 sq ft, none of which has seen any preletting activity.the largest scheme to go under construction is Heron International s 471,88 sq ft Heron Tower, EC2, which is scheduled for completion in Q Second to this is the proposed 115,55 sq ft development at 1 Lothbury, EC2, due for completion in Q2 29. Supply of secondhand stock has also risen this quarter, increasing by 4% on Q4 27.The largest amount of secondhand stock to come to the market was at Fitzwilliam House, EC3, where the basement, ground and first floors, totalling 3,22 sq ft, became available. As already mentioned, the amount of withdrawn stock this quarter has increased significantly on Q4 27 and this time last year with a total of thirteen properties being taken off of the market, totalling over 93, sq ft, the majority of which is at 1 Bishopsgate, EC2. Elsewhere, at Royal London House, Finsbury Square, EC2, 59,37 sq ft was taken off of the market. Availability Rate (%) Availability rates have risen in the City core this quarter rising to 6.45% from 6.14% last quarter.the low take up levels seen so far this year outweighed the slightly reduced supply levels and could not prevent an increase in vacant stock to the market, causing availability rates to rise. Despite this, levels are still somewhat down on the 6.7% seen in Q1 27.There is growing concern however, that with occupier demand becoming more subdued and large amounts of space scheduled to complete in the following quarter, much of which remains available, availability rates could continue to rise. St Botolph House, EC3: Lockton International takes 84, sq ft Stock Exchange Building, EC3: DTZ takes 74,7 sq ft Q2 26 Q3 26 Q4 26 Q1 27 Q2 27 Q3 27 Q For all data enquiries call

9 London Offices Market Analysis (per sq ft) Asking rents started to show signs of a decline this quarter for new build stock. Following the slowdown of Q4 27 and the lacklustre start to 28 in terms of take-up figures the average now stands at per sq ft, down from the per sq ft of last quarter. Asking rents for secondhand stock have continued to increase slightly to per sq ft, up from per sq ft last quarter.an increased rent has been released at City Place House, 55 Basinghall Street, EC2 where the rent for the second floor now stands at 49.5 per sq ft. However, several properties have seen rents fall for secondhand space, with asking prices dropping at Vintners Place, EC2 and Cheapside House, EC2, by 2.5 and 5 per sq ft respectively. Construction Following the high levels of speculative starts seen over the past Construction Starts with Prelets two quarters, we saw a drop in construction starts this quarter with only 69, sq ft getting underway, half as much as last quarter.the largest scheme to go under construction, other than Space (sq ft) 2 the Heron Tower, EC2, and 1 Lothbury, EC2, was Frogmore s 33, 27 sq ft 46-5 St Mary Axe, EC3, which started in February. None Speculative Prelet of the space that started this quarter has been prelet and with construction starts looking to return to a high level in Q2, when 1.46 million sq ft is scheduled to begin, it appears that the market could be swamped with space if preletting activity does not increase.the largest scheme set to get underway in Q2 will be the Pinnacle Tower, EC2, where 1.26 million sq ft is expected upon completion in 211. Only three schemes completed this quarter, totalling 26,67 sq ft, the largest being the 122,3 sq ft Ludgate West, EC4, where 84,27 sq ft was prelet in Q3 27. Next quarter there is set to be an abundance of completed new or refurbished space on the market with over 2.5 million sq ft due for completion,a huge 2.6 million of which remains available.the largest scheme set to complete is British Land s 21 Bishopsgate, EC2, where 11,5 sq ft is still on the market. Second to this is DB Real Estate and Canary Wharf Group s 2 Aldersgate Street, EC1 development where the entire 357,84 sq ft remains available.the remainder of 28 is set to see 4.1 million sq ft of space complete, with a remarkable 81%, 3.3 million sq ft, of this space yet to be let. With occupier demand currently at a low, the outlook for the remainder of the year appears to be rather bleak.the large volumes of space currently under construction seem to suggest high occupier demand, however, with the City core relying largely on the financial services market, and this area being hit by the current market credit issues, demand for new space may be on the decline.there is now the growing possibility that several schemes will be put on hold until conditions pick up.this has been seen at Land Securities Walkie Talkie Tower, 2 Fenchurch Street, EC3, where construction may not start if the current conditions continue and no substantial prelet is achieved. Elsewhere, work has stopped at Exemplar Properties 93, sq ft, 67 Lombard Street, EC3, where the developer is looking for a new funding partner or to sell the site, which it owns with Morgan Stanley Real Estate Fund. Q2 26 Q2 26 New Build (existing) Secondhand Q3 26 Q3 26 Q4 26 Q4 26 Q1 27 Q1 27 Q2 27 Q2 27 Q3 27 Q3 27 Q4 27 Q4 27 One Lothbury, EC2: 116, sq ft gets underway Completed Space Actively Marketed Space (sq ft) Q2 26 Q3 26 Complete Still Available Q4 26 Q1 27 Q2 27 Q3 27 Q4 27 Completions with Space Available Space (sq ft) 25 Q2 28 To Complete Still Available Q3 28 Q4 28 Q1 29 Q2 29 Q3 29 Q4 29 Q1 21 Q2 21 Q3 21 Q4 21 Q1 211 Q3 211 Investment On a slightly more positive note, investment sales this quarter began to rise for the City core, with 6, sq ft of office space being sold across six transactions, up from the 49, sq ft seen last quarter. However, this value is still much lower than Q1 27 where 1.37 million sq ft was sold across 22 schemes. It has become evident that properties are beginning to sell for cut prices as the current pricing correction continues to affect the market.the most valuable deal to go through this quarter was the 145 million sale of 1 Queen Street Place, EC4, where the long leasehold was initially placed on the market for 18 million.a group of private Irish Investors, backed by the Anglo Irish Bank, bought the long leasehold from Morley Fund Management Ludgate West, EC4: 122,3 sq ft completes For all data enquiries call

10 West End % +/- % +/- % +/- Take up (sq ft) 24 months 12 months 3 months New/Refurb existing 67, Premarketing 7,7 n/a n/a n/a Secondhand 555, Under Construction 57,637 n/a Total 687, Take Up West End take up was again disappointing this quarter with figures dropping by 22% on last quarter and 43% on this time last year.take up of new or refurbished stock plummeted by 64% on last quarter. Only five deals of this grade completed with a total of 67,82 sq ft being let.the largest letting to occur was at Victoria Central, 111 Buckingham Palace Road, SW1, where 3,93 sq ft was let to Abbey Business Centres on a new sublease from the Pacific Group. Take up of space under construction also declined this quarter and was down by 47% on last quarter.the largest letting to take place in the West End this quarter of space of this grade was at 9 Cavendish Square,W1, where Chevron Texaco took Freshwater s entire 3,8 sq ft on a prelet at the proposed property, which is due for completion next quarter. Second to this was the 27,56 sq ft letting to Och Ziff at Iona, 4 Argyll Street,W1, where the tenant plans to take occupation in May 28 once the property completes. Lettings of secondhand stock dropped this quarter, down by 4% on last quarter and 5% on this time last year with only 555,39 sq ft being taken.the largest deal to take place was the letting at 1 Curzon Street,W1, where GLG Partners took 3,33 sq ft and elsewhere, 23,5 sq ft was let at Ashdown House, 123 Victoria Street, SW1, to Transport for London on a short term sublease from the Government department until December this year. Only one letting of premarketed space took place when serviced office space provider Regus took an additional 7, sq ft at Berkeley Square House,W1, where it plans to take occupation in Q4 28 following the refurbishment from A2 to B1 use. A total of 329,1 sq ft went under offer this quarter, up from the 237, sq ft seen in Q4 27 but down from the 462,85 sq ft of this time last year.the largest single unit to be placed under offer was the 23,12 sq ft seventh floor (south block) at the newly refurbished 55 Baker Street,W1. Supply % +/- Sq % ft +/- Mkt Shr % +/- Supply (sq ft) 24 months 12 months 3 months Supply for the West End market rose slightly this quarter increasing by 5%, bolstered by a 72% increase New/Refurb existing 317, in new or refurbished stock to the market.the largest addition of this grade of space was at Portman Estates Premarketing 1,671, Baker Street,W1, which saw a refurbishment of the Secondhand 2,448, ,565 sq ft property complete. Another large scheme Under Construction 1,479, to complete was Terrace Hill s 6,21 sq ft Davis House,Wilton Road, SW1, where the entire building Total 5,916, remains available. Supply of stock under construction also increased, by 2% on last quarter. This increase is largely due to Development Securities 349, sq ft 2 Kingdom Street going under construction. Elsewhere at Legal & General s Fortress House, 23 Savile Row,W1, the 91,5 sq ft proposed property went under construction. Supply of secondhand stock increased this quarter, rising by 3% on Q4 27, with 2.45 million sq ft currently available.the largest new addition to the market was 1 Drummond Gate, SW1, where the Office of National Statistics is set to vacate the 16, sq ft property to new premises in Islington in Q2 28. The West End has seen a slight decrease in supply of premarketed stock this quarter, falling by 1% on Q4 27, and 16% on this time last year. Newly premarketed stock includes three schemes, the largest of which is Great Capital Partnership s 52,5 sq ft speculative development at Walmar House, 3 Regent Street,W1, which is yet to have a planning application submitted, but is expected to have a completion date scheduled for early 29 should permission be given. Following the low levels of withdrawals from the market in the West End last quarter, this quarter has seen a small increase with 3, sq ft spread over 1 schemes being taken off of the market.the largest property to be taken off of the market was the 4,93 sq ft second floor at 46 Gillingham Street, SW1, following a deal which fell through. Availability Rate (%) Q2 26 Q3 26 Q4 26 Q1 27 Q2 27 Q3 27 Q4 27 The availability rate for the West End continued to increase this quarter, rising to 4.5% from the 4.2% seen last quarter, where it had risen for the first time since Q4 24. In comparison to Q4 27, a much higher level of new or refurbished stock completed this quarter with over 158,93 sq ft currently still available.this, coupled with poor take up of this grade, down 64% on last quarter, has resulted in a higher availability rate. However, demand for good quality stock has always been high in the West End and it is expected that this will be absorbed through take up. The number of speculative starts was lower this quarter with only 115,1 sq ft getting underway, and 23,25 sq ft of this space has already been prelet. However, there is a large amount of space set to complete in Q4 28, 738,45 sq ft of which is still available.this will need to be taken through increasing take up levels if the availability rate is to remain at a low level. 9 Cavendish Square,W1: Chevron Texaco prelets 3, sq ft 1 Curzon Street,W1: GNG Partners takes 3, sq ft 9 For all data enquiries call

11 London Offices Market Analysis (per sq ft) Asking rents rose for new build stock this quarter and are back to the high levels seen prior to the decline of Q4 27.A much needed supply of new build space has become available and the average asking rent now stands at per sq ft up from the per sq ft seen last quarter.a new addition to the market, which has been largely responsible for this increase, is the newly built 65 Grosvenor Street,W1, (former Broadbent House) where the entire 25, sq ft property is on the market at a quoting rent of 135 per sq ft.the building, which is typically favoured by wealth management companies, hedge funds and private equity occupiers, had previously been rumoured to have had an offer submitted to the developers in the region of 15 per sq ft during construction. Asking rents for seconhand stock dropped very slightly this quarter, down from 59.2 to 57.4 per sq ft, the first drop for two years.this could be due to the large amount of new stock which has completed, attracting a large amount of attention from occupiers currently seeking high quality space, which the West End market was previously lacking. Q2 26 New Build (existing) Secondhand Q3 26 Q4 26 Q1 27 Q2 27 Q3 27 Q4 27 Construction Construction work began this quarter on five schemes totalling 464, sq ft, only 23, sq ft of which has been prelet.the largest scheme to get underway was Development Securities 2 Kingdom Street, which is being marketed by CB Richard Ellis and Savills. Elsewhere, Derwent London s 47,26 sq ft Charlotte Building, Gresse Street,W1 started, where an agent is yet to be appointed. Of the properties under construction / refurbishment only one has seen any signs of preletting activity.this is the 23,25 sq ft Howland Street,W1, which has been entirely prelet to Arup who Construction Starts with Prelets Space (sq ft) Speculative were also in occupation of the previous property on site. This quarter has seen six schemes complete, totalling one million sq ft with the largest scheme, other than the previously mentioned 55 Baker Street,W1, being Land Securities 5 Queen Anne s Gate, SW1, where 34,72 sq ft completed all of which is let to Ministry Prelet 9 of Justice. Looking ahead to the rest of 28, construction work is scheduled 6 to complete on 2.78 million sq ft, 49% of which is still available.the largest scheme scheduled to complete in the remainder of 28 is 3 British Land s development at Regent s Place,W1. Other than this there is the 167, sq ft scheme at Great Portland Estates Mortimer Street,W1, due to complete in Q4 28, where an agent is yet to be appointed. Q2 26 Q3 26 Q4 26 Q1 27 Q2 27 Q3 27 Q Baker Street,W1: 23, sq ft under offer Completed Space Actively Marketed Completions with Space Available Space (sq ft) Q2 26 Q3 26 Q4 26 Q1 27 Complete Still Available Q2 27 Q3 27 Q4 27 Space (sq ft) 1 Q2 28 To Complete Still Available Q3 28 Q4 28 Q1 29 Q2 29 Q3 29 Q4 29 Q1 21 Q2 21 Q3 21 Q4 21 Q1 211 Q3 211 Investment Investment sales in the West End saw 653,27 sq ft sold this quarter spread over a total of 21 deals. Despite the number of deals completing being down on the 35% of this time last year, the volume of sq ft sold was up on both last quarter and this time last year.the largest deal to complete was at 2 Kingdom Street,W2, when a 5% stake in the property was sold to Quinlan Private from Morley Fund Management for 1 million. Elsewhere, the freehold at 14 Tothill Street, SW1, comprising of 58,91 sq ft, was purchased by German fund manager Realis for 57.8 million.this was slightly lower than the asking price of 66 million and indicates the possibility that stock in the West End may be overvalued Charlotte Building,W1: 37, sq ft scheme underway For all data enquiries call

12 Midtown % +/- % +/- % +/- Take up (sq ft) 24 months 12 months 3 months New/Refurb existing 27, Premarketing - n/a n/a n/a Secondhand 184, Under Construction n/a -1. Take Up Midtown saw poor levels of activity this quarter with only 27 deals completing, none of which were prelets, and take up down by 6% on last quarter and 4% on this time last year.the largest deal to take place was the 21,23 sq ft letting at New Printing House Square, Gray s Inn Road,WC1, where an undisclosed occupier took part of the first floor. Total 212, Take up for new or refurbished space is down substantially, by 79% on last quarter. Only two deals of this grade completed totalling 27,69 sq ft, the largest at 322 High Holborn,WC1, where 14,75 sq ft was let to Charter PLC. Take up of secondhand space was also severely down this quarter, dropping by 38% on Q4 27 and 37% on this time last year. Only 13, sq ft was placed under offer this quarter with the largest single unit being the 9,71 sq ft third floor at 1 Plough Place, EC4. % +/- Sq % ft +/- Mkt Shr % +/- Supply Supply (sq ft) 24 months 12 months 3 months Supply for Midtown rose slightly, increasing by 7% on last quarter. This increase was largely due to the New/Refurb existing 194, amount of space under construction coming on to the Premarketing 315, market, rising by 18% on Q4 27. The largest scheme Secondhand 1,765, to get underway was the refurbishment at Holbrook Under Construction 1,38, House, Great Queen Street,WC2, where 16,88 sq ft started, all of which is available, and is due Total 3,583, for completion in Q3 this year. Available secondhand stock has risen this quarter by 13% on Q4 27 and 28% on this time last year.this increase is largely a result of the 33, sq ft now available on a sublease from Sainsbury s at 33 Holborn, EC1. New or refurbished stock rose slightly, by 2%, with new additions to the market including Charing Cross Road,WC2, where 23,63 sq ft is now available. This quarter has seen a decrease in premarketed space, down by 35% on last quarter.this is a result of more space going under construction, with figures up by 18% on Q4 27. A total of 1, sq ft was withdrawn from the market this quarter, including 59,38 sq ft at Halsbury House, 35 Chancery Lane,WC2, where Lexis Nexis Europe remains in occupation. Availability Rate (%) Q2 26 (per sq ft) 7 Q3 26 Q4 26 Q1 27 Q2 27 Q3 27 Q4 27 Availability rates for Midtown continued to rise this quarter, and have been since Q2 27.The rate now stands at 6.5%, up from the 5.75% of last quarter and the 5.29% seen this time last year.this increase is a result of rising supply levels that were not absorbed by take up. Like most markets this quarter, Midtown saw no take up of premarketed space.with 77, sq ft due to complete in 28 and 78% of this space still available, activity will need to improve if this increase is going to slow and availability rates are to tighten again. Asking rents for new build stock plummeted by 19.8 per sq ft this quarter, and now stand at per sq ft. This decline was largely due to several properties on the market with low level rents, including Arundel Great Court,WC2, where the quoting rent on the 12,95 sq ft property is per sq ft. Asking rents for secondhand space continued to rise and the average now stands at 45.4 per sq ft, up from the 41.7 per sq ft seen last quarter. The average rent has been boosted by newly available space coming on to the market, inlcuding at 33 Holborn, EC1, where a quoting rent of 52.5 per sq ft has been released. This has closed the gap between the average for new build and secondhand space, which is now showing the smallest difference since Q Construction Midtown saw only one scheme complete this quarter, at Schroder Property Funds 32, sq ft 7 Dials Warehouse,WC2 which Expedia.com took on a prelet last quarter. Construction got underway on three schemes totalling 136,4 sq ft. The largest scheme to begin, other than the previously mentioned Holbrook House, was Bedford Estates 22,53 sq ft development at Bloomsbury House, Great Russell Street,WC1, where the entire building remains available. Q2 26 New Build (existing) Secondhand Q3 26 Q4 26 Q1 27 Q2 27 Q3 27 Q4 27 Investment The Midtown investment market was very quiet this quarter with only seven sales completing.the largest single transaction to complete was the sale of the Metropole Building, Northumberland Avenue,WC2, where the freehold was purchased by Istithmar, the Dubai investment fund, for 13 million. New Printing House Square, WC1: 21,2 sq ft let Ray House, EC4: Long leasehold sold for 22 million 11 For all data enquiries call

13 Docklands % +/- % +/- % +/- Take up (sq ft) 24 months 12 months 3 months New/Refurb existing Premarketing n/a n/a Secondhand 328, Under Construction - n/a n/a n/a Total 328, Take Up Docklands was one of only three markets that saw take up figures rise this quarter, which were up by 488% on last quarter, and by 517% on this time last year.the sole reason for this improvement was in the amount of secondhand stock taken, rising by 518% on last quarter.the largest deal to take place was at One Canada Square, where Moody s Investors Services took 164,93 sq ft on a new lease at 45.5 per sq ft. Elsewhere De Vere & Company took 33,25 sq ft at 1 Westferry Circus, spread over part of the ground and first floors. No deals of any other grade of space completed. Very little space went under offer this quarter, a total of only 5, sq ft.the largest unit to go under offer was at 1 Upper Bank Street, where the 27, sq ft 16th floor has gained interest. Supply Supply for the Docklands dropped slightly this quarter falling by 2% on last quarter but up by 9% on this time last year.this decline was a result of a fall in the availability of all building grades, with the exception of space under construction which rose by 16%. New additions to this grade include the 375, sq ft 25 Churchill Supply (sq ft) New/Refurb existing Premarketing Secondhand 29,327 4,362, ,996 % +/- 24 months Sq % ft +/- 12 months Mkt Shr % +/- 3 months Place, which went under construction in January. Supply of premarketed space fell this quarter by 1% and this was solely due to the increase in the volume of space under construction and not a result of take up. Supply of secondhand stock also fell this quarter and was down by 14% on Q4 27 and 18% on this time Under Construction 3,63, n/a 16.3 last year.this was due to the huge increase in the Total 8,175, amount of space taken this quarter. Withdrawn figures for Docklands remained at a relatively low level this quarter with 54,91 sq ft being taken off of the market.at 1 Canada Square, 28, sq ft was withdrawn from the market on the 24th floor, with current tenant State Street Bank and Trust Company planning to remain in occupation. Also at this property, 24,95 sq ft on part of the 19th floor was withdrawn. Availability Rate (%) Q2 26 Q3 26 Q4 26 (per sq ft) New Build (existing) 1 Secondhand 5 Q2 26 Q3 26 Q4 26 Q1 27 Q1 27 Q2 27 Q2 27 Q3 27 Q3 27 Q4 27 Q4 27 London Offices Market Analysis Availability rates continued to tighten this quarter, as a result of greatly improved take up and limited supply levels, and now stand at 4.46%, down from the 5.6% of Q4 27 and 6.87% of this time last year.the outlook for the remainder of 28 seems to be one of stability with 49, sq ft set to complete, 74% of which has already been prelet. Average asking rents for new build stock dropped this quarter falling to per sq ft.this is down from the 39 per sq ft seen last quarter but up on the seen in Q3 27.This low value is largely due to only two properties currently quoting rents. Asking rents for secondhand stock continued to rise this quarter with the average price per sq ft now standing at per sq ft, up from the per sq ft last quarter.this rise was contributed to by an asking price of 49.5 per sq ft being released at 1 Churchill Place and 47.5 per sq ft being released at 1 Upper Bank Street. Construction Only two schemes went under construction this quarter totalling 379,73 sq ft.the only scheme other than the 375, sq ft 25 Churchill Place to get under way was Oracle Estate s 4,7 sq ft Canary Quarter, 2 Millharbour. Docklands again saw no schemes complete this quarter.the remainder of 28 is set to see 49, sq ft spread across four properties complete, the largest of which is Prudential s 363,28 sq ft 2 Churchill Place, all of which is prelet and is due to complete in Q4 28. Investment Docklands saw no investment sales take place this quarter and little interest shown as no investment opportunities were placed under offer.this may be a sign that investor confidence is at a low and that banks are more reluctant to lend the finances for purchases.there are also very few investment opportunities available in the current market with freeholders worried that asking prices are unlikely to be met and thus deciding to hold on to their assets until conditions pick up.the largest availability is at Arrowhead, 6 Marsh Wall, where the property is available to let or purchase from Ballymore Properties. 1 Upper Bank Street, E14: 27, sq ft under offer 2 Churchill Place, E14: 363, sq ft due to complete Q4 28 For all data enquiries call

14 City Fringe % +/- % +/- % +/- Take up (sq ft) 24 months 12 months 3 months New/Refurb existing 182, Premarketing - n/a n/a n/a Secondhand 267, Under Construction - n/a n/a n/a Total 45, other deals completed for this grade of space, all at The Wool House, 74 Back Church Lane, E1. Take Up Take up for the City fringe rose this quarter by 26% on last quarter and 82% on Q1 27.This increase was due to 182,62 sq ft of new or refurbished stock being let, up 239% on last quarter.the largest deal to take place, and the sole reason for this increase, was at Milton Gate, Chiswell Street, EC1, where 171,8 sq ft was taken by Addleshaw Goddard.The 25,7 sq ft fifth floor was also taken but was immediately leased back to freeholder UBS for a term of 3-5 years. Only three Take up of secondhand stock dropped this quarter by 12% on Q4 27, but was up by 33% on this time last year.the largest deal to go through was the 45,4 sq ft letting to an undisclosed occupier at Old Truman Brewery, Brick Lane, E1. This quarter saw 117,67 sq ft go under offer, with the largest deal in the pipeline being the 27,89 sq ft on the 8th floor at 1-1 Bishops Square, E1. % +/- Sq % ft +/- Mkt Shr % +/- Supply Supply (sq ft) 24 months 12 months 3 months Overall, supply levels in the City fringe fell in, down by 5% on last quarter.the largest decrease was New/Refurb existing 344, seen for new or refurbished existing stock, declining by 29% on last quarter and 6% on this time last year, as a Premarketing 2,194, result of successful take up. Supply of premarketed space Secondhand 1,611, fell by 3% on Q4 27.This was not a result of improved Under Construction 34, take up as no prelets signed this quarter, but due to four Total 4,489, schemes completing this quarter, the largest being the 8,99 sq ft Denim Factory, Davenant Street, E1. Supply of secondhand stock also decreased this quarter and was down by 5% on last quarter and 31% on this time last year. Once again this was not a result of improved take up for the quarter, but due to space being withdrawn from the market. Space under construction increased this quarter rising by 25% on Q4 27 as eight schemes got underway, the largest of which is the 48,44 sq ft development at ISG InteriorExterior s Nido Spitalfields, 1 Middlesex Street, E1. A total of 53,76 sq ft was withdrawn from the market this quarter, the most notable of which was at Lincoln Place, 5 Farringdon Road, EC1, where Merrill Lynch decided to remain in occupation of the entire 32, sq ft building. Availability Rate (%) (per sq ft) Q2 26 Availability rates for the City fringe continued to tighten very slightly this quarter as a result of improved take up activity and a reduced level of supply.the current rate stands at 9.3% down from the 1.17% seen last quarter.the rate is however, still the highest across all markets despite the largest letting of the quarter taking place in this market.with 342, sq ft of speculative space due to complete this year, preletting activity will have to start if the availability rate is to remain in single figures. Asking rents continued to rise for both new build and secondhand stock this quarter. New build stock saw an average increase of 1.75 per sq ft to 49. per sq ft.a new quoting rent was released at 1-1 Bishops Square, E1, rising by 2.5 per sq ft to 57.5 per sq ft for the 64, sq ft available. Secondhand space has seen an increase of 2.35 per sq ft on last quarter, rising to 32.69, with new quoting rents being released at several properties. One increase was seen at a property quoting a particularly low rent at 18A Ensign Street, E1, increasing from per sq ft to 19.5 per sq ft. Construction Work commenced on a total of 132,48 sq ft this quarter spread across eight schemes including Nido Spitalfields, E1.The largest of the four schemes to complete this quarter, other than the Denim Factory, E1, was the 8,29 sq ft South Stable Building, 138 Kingsland Road, E2, where an agent is yet to be appointed. Investment Investment activity in the City fringe has been extremely lacklustre with only two deals completing, the largest of which was the 9 million sale of the freehold at 75 Farringdon Road, EC1. Elsewhere the long leasehold at 136 Old Street, EC1, sold for 47, to owner occupier Trouble Free I.T. Q2 26 Q3 26 New Build (existing) Secondhand Q3 26 Q4 26 Q4 26 Q1 27 Q1 27 Q2 27 Q2 27 Q3 27 Q3 27 Q4 27 Q4 27 Apollo Court, E1: Global Tea & Commodities takes 35,4 sq ft 75 Farringdon Road, EC1: Freehold sells for 9 million 13 For all data enquiries call

15 Southern Fringe % +/- % +/- % +/- Take up (sq ft) 24 months 12 months 3 months New/Refurb existing - n/a Premarketing - n/a n/a n/a Secondhand 44, Under Construction 5, n/a n/a Total 95, Take Up Take up for the Southern fringe declined by 23% on last quarter and 52% on this time last year with only four deals completing in total. No deals of premarketed or new or refurbished stock took place this quarter. Take up of secondhand stock also declined this quarter by 61% on last quarter and 68% on this time last year. The largest deal to complete was the 25,48 sq ft letting at New City Court, 2 St Thomas Street, where Guy's and St Thomas' NHS Foundation Trust took the space. Elsewhere, 4, sq ft was taken by Planning Potential Limited at Magdalen House, Tooley Street. A total of 5,95 sq ft of space under construction was taken this quarter, with just one deal completing at 3 Park Street, where Hyde Housing Association took the entire proposed property on a 2 year lease at 42.5 per sq ft.the tenant plans to take occupation later this year, when the building is due to complete. Only 24,97 sq ft was placed under offer this quarter, the majority of which was at New Kings Beam House, where 1,8 sq ft is under offer in total. Supply Supply levels for the Southern fringe fell slightly this quarter by 3% on last quarter and down by 31% on Q1 27.Available secondhand stock increased to 478,61 sq ft and included an addition at Harling House, Great Suffolk Street, where 13,87 sq ft is now available. Supply of premarketed space has remained Supply (sq ft) New/Refurb existing Premarketing Secondhand 27,66 793, ,68 % +/- 24 months Sq % ft +/- 12 months Mkt Shr % +/- 3 months the same as last quarter and is down by 13% on this time last year. New or refurbished stock declined this quarter by 19% and space under construction declined by 1% due to the letting at 3 Park Street. Only 9,45 sq ft was withdrawn from the market this quarter, spread over three properties, the largest being Under Construction the withdrawal of the basement floor at New Kings Beam House. Elsewhere the first and second floors Total 1,3, were withdrawn at 21 Tooley Street Availability Rate (%) Q2 26 Q3 26 Q4 26 (per sq ft) 7 6 New Build (existing) 5 Secondhand Q2 26 Q3 26 Q4 26 Q1 27 Q1 27 Q2 27 Q2 27 Q3 27 Q3 27 Q4 27 Q4 27 London Offices Market Analysis Availability rates for the Southern fringe increased again this quarter, but at a lower rate than Q4 27, and now stand at 4.91%.This was again due to declining take up for the quarter and although supply levels also dropped, it was not enough to prevent the rate from slackening.with 236,55 sq ft due to complete this year and no space still available the outlook for the Southern fringe market appears to be relatively stable. Asking rents for both new build and secondhand stock continued to rise this quarter but again the rate of increase has been subdued. New build stock now has an average quoting rent of per sq ft up from the 47.5 per sq ft seen last quarter and average rents for secondhand space increased slightly from the 33.5 per sq ft to per sq ft.a new rent for secondhand stock was released at Sea Containers House where the fifth floor south unit came on to the market and is now available at a quoting rent of 35 per sq ft. Construction It has again been an extremely quiet quarter for the Southern fringe in terms of construction.there have been no new starts this quarter and no properties have completed.the pipeline for the remainder of 28 remains quite quiet, with 236,55 sq ft due to complete spread over two properties. Both schemes have already been fully prelet, the largest of which is, 3 Park Street.The remaining proposed property, 16 Tooley Street, is estimated to include 185,6 sq ft upon completion and has been entirely prelet to the London Borough of Southwark. Only one start is scheduled for the remainder of the year and this is at Sellar Properties 58, sq ft Shard of Glass development, which saw demolition start on site this quarter. Investment Only four investment deals completed this quarter.the largest transaction to take place was the sale of the freehold at the currently under construction 16 Tooley Street, from UBS Global Asset Management to a private investor for 135 million. Elsewhere stakes in the Shard of Glass and New London Bridge House were purchased by Qatari consortium, Zijaj for 3 million. 3 Park Street, SE1: Entire 51, sq ft prelet to Hyde Housing Association 16 Tooley Street, SE1: 185,6 sq ft due to complete next quarter For all data enquiries call

16 What London Offices monitors Markets City Core: EC1A, EC2M, EC2N, EC2R, EC2Y, EC2V, EC2A (only Finsbury Pavement, Finsbury Square,Appold Street and Chiswell Street), EC3, EC4 (excluding EC4A & EC4Y) City Fringe: EC1M, EC1N (excluding postcode sector 2), EC1R, EC1V, EC1Y, EC2A (excluding Finsbury Pavement, Finsbury Square,Appold Street and Chiswell Street), E1 Southern Fringe: SE1 postcode sectors,, 1, 2 & 9 Docklands: E14 Midtown: EC4A & EC4Y, EC1N (postcode sector 2),WC1,WC2 (excluding Leicester Square) West End:W1, SW1, NW1 sectors 2 (Euston Road only), 3, 5 & 6, Leicester Square (WC2) and W2 sectors 1 & 6 Additional Markets South Central: Remainder of SE1 and SE11 North Central: Remainder of NW1 and N1 West Central: Remainder of W2,W6,W8,W14, SW3, SW5, SW6, SW7 & SW1 Data Building Stock: Any office building over 93 sq m (1, sq ft) in City Core,West End, Midtown, Docklands, City Fringe and Southern Fringe and over 465 sq m (5, sq ft) in North Central,West Central and South Central Availability: Any unit above 93 sq m (1, sq ft) in buildings subject to the above stock thresholds Take up: Any unit above 232 sq m (2,5 sq ft) subject to stock thresholds Planning: Any project over 232 sq m (2,5 sq ft) subject to stock thresholds EGi London Offices Estates Gazette Group 1 Procter Street London WC1V 6EU For all data enquiries call

17 Definitions London Offices Market Analysis Quarters: For data collation reasons, our quarters run from the 1st of the month to the last day of the 3rd month i.e. 1st January to 31st March; 1st April to 3th June; 1st July to 3th September and 1st of October to 31st December. Some data in this report is given in half years for space reasons. Agency League Tables: The total space disposed by each agent adds up to more than total take-up.this is because space in joint agency deals has been attributed to all agents involved.the market share is each agent s share of take-up, not the total of all agents.the tables include all completed deals over 93 sq m (1, sq ft) within our boundaries (see map) including prelets and excluding space under offer, lease renewals, restructures or investment sales. : Total building stock figures divided by vacant space which is actively being marketed. Neither figures include space under construction or yet to commence construction. Availability: New/Refurb (existing) is a combined total of newly constructed and refurbished space; Premarketing is any space marketed which is yet to commence construction; Secondhand is any space which has previously been occupied; Under Construction is a combined total of refurbishment and redevelopment projects currently under construction. Space under offer is included. Investment properties are not included. Take Up: See criteria and definitions above. Average Asking Prices: An average of asking prices by grade of space by market. Only space available on new leases with a quoting rent is collated. Space under offer has been included. Please note that Secondhand Grade A space is previously occupied units with air conditioning and one or more of raised floors, under floor trunking or perimeter trunking. Investment Sales: Subject to stock thresholds, a total of space sold as freehold, long leasehold or virtual freehold, both for investment and for owner occupation. Construction Starts with Prelets: A total of space commencing refurbishment or redevelopment by quarter with a total of that space prelet.this includes space not on the market. Completed Space Actively Marketed: Simply a total of completed refurbishments and redevelopments being actively marketed by quarter. Includes space let but never occupied. Completions with Space Available: A total of all office space currently under construction by completion date with how much is still available.this includes space not on the market. For all data enquiries call

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20 London Office Database Contacts Hannah Gardiner Team Manager London Research Estates Gazette Group 1 Procter Street London WC1V 6EU Tel: [email protected] Andy Heard Researcher London Offices Tel: LO Sales and Subscriptions Daniel Clements Sales Manager Tel: [email protected] This report is published for general information only. Although high standards have been used in the preparation of the information, analysis, views and projections presented in this report, no legal responsibility can be accepted by London Offices or EGi for any loss or damage resultant from the contents of this document. As a general report, this document does not necessarily represent the view of EGi in relation of particular properties or projects. Reproduction of this report in whole or in part is allowed with proper reference to EGi s London Offices.