1 Economic Context 1
London & UK economic indicators GDP Growth (%) House Hold Disposable Income Growth (%) 12 10 8 6 4 2 0-2 -4-6 -8 6 4 2 0-2 -4-6 UK London UK London 3 2.5 2 1.5 1 0.5 0-0.5-1 Working Age Population Growth (%) GDP growth long term average UK 2.5% vs London 3.1% Household disposable income long term average UK 2.8% vs London 2.9% Working age population growth long term average UK 0.45% vs London 0.80% Between 2015 and 2018 we forecast that London will experience above trend growth across all of these indicators UK London 2
2 Change in Occupier Profile 3
Central London take-up by Sector 2007 Professional services Service sector Professional Services, The Service By 2013 Sector, their share Banking of annual and take-up Finance had fallen made to 33%. up over With 50% the TMT of deals in sector 2007 now accounting for 30% 2013 Professio services Service sector Banking and finance Associations Banking finance Property and construction Professional services Banking and finance Property and construction TMT Unknown Insurance Service sector Associations Corporate Public sector Retailer Serviced Offices 4
Office vacancy EC1 City 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% 5
Southbank take-up Take-up million sq ft 2 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 Take-up More London, 2&3 Bankside 5 year ave. The News Building, Sea Containers 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 H1 2014 6
3 Traditional Occupiers 7
Central London office deals Date% Address% Postcode% Tenant% Floor% Size% Sep$13' The'News'Building' SE1' News'Interna9onal' En9re'Building' 430,000' Dec$13' One'London'Wall'Place' EC2' Schroders' En9re'Building' 310,000' Aug$13' Sea'Containers'House' SE1' Ogilvy'&'Mather'Limited' En9re'Building' 226,000' Jul$14' 25'Churchill'Place' E14' EY' 14 th 'to'21st' 205,000' Jul$14' Two'New'Ludgate' EC4' Mizuho'Bank' En9re'Building' 198,000' Jul$13' Cannon'Place' EC4' CMS' '1 st,'2 nd,'3rd' 140,000' Feb$14' 8$10'Moorgate' EC2' ING'Bank' En9re'Building' 120,000' 8
4 Growing Occupiers 9
The growth of the TMT & serviced office sectors Percentage of Central London take-up 35% TMT Serviced Office 30% 25% 20% 15% 10% 5% 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 10
Amazon London office deals Date% Address% Postcode% Tenant% Floor% Size% Type%of%Space% S7ll%in% Occupa7on?% Mar$12' The'Glasshouse' EC1' Amazon'(Push'BuYon)' En9re'Building' 47,560' First'Move' Yes' May$13% Sixty'London' EC1' Amazon' En9re'Building' 212,995' Expansion' Yes' Sep$14% Leadenhall'Court' EC1' Amazon' En9re'Building' 86,200' Overflow'Space' Yes' Sep$14' Principal'Place' EC2' Amazon' Whole'office' space' 430,000' Consolida9on' Pre$let' 11
Google London office deals Date% Address% Postcode% Tenant% Floor% Size% Type%of%Space% S7ll%in% Occupa7on?% May$03' The'Courtyard,'SuYon'Row' W1' Google' 3 rd,'4 th,'5 th '' 14,595' First'Move' No' Aug$05' Jun$06' Nov$07' Sep$08' Belgrave'House,'76'Buckingham'Palace' Road' Belgrave'House,'76'Buckingham'Palace' Road' Belgrave'House,'76'Buckingham'Palace' Road' Belgrave'House,'76'Buckingham'Palace' Road' SW1' Google' Part'4 th 'and'5th' 52,525' Expansion' Yes' SW1' Google' Part'3rd' 10,000' Expansion' Yes' SW1' Google' Part'3rd' 10,317' Expansion' Yes' SW1' Google' Part'3rd' 10,300' Expansion' Yes' Aug$10' 123'Buckingham'Palace'Road' SW1' Google' 3rd' 41,465' Expansion' Yes' Mar$11' 123'Buckingham'Palace'Road' SW1' Google' Part'1 st' (1 st )' 37,442' (45,058)' Expansion' Yes' May$11' Central'St'Giles' WC2' Google' 3rd'to'6 th '+'9th' 157,562' Expansion' Yes' Sep$11% 4$5'Bonhill'Street'(Google'Campus)' EC2' Google' Campus' En9re'Building' 24,883' Expansion' Yes' Mar$13% Kings'Cross'Central'(Dev'Site)' N1C' Google' Proposed'HQ'site' 800,000' Consolida9on' Site'Purchase' Feb$14' 6'Pancras'Square' N1C' Google' Upper'Half' 163,477' Interim'Space?' Pre$let' 12
5 Changing Landscape 13
Central London prime rents by sub market Market 2010 2014 Growth King's Cross 37.50 68.50 83% Soho 52.50 82.50 57% St James s/mayfair 90.00 120.00 33% City Fringe 40.00 52.50 31% City Core 53.50 62.50 17% 14
Right mix of space? 15
Something different Buckley building Alphabeta 16
Mixed use / Critical mass King s Cross Central The International Quarter 17
Fit for purpose Upper Bank Street 10 Aldermanbury 125 London Wall 18
Iconic / Luxurious The Shard 10 New Burlington Street 19
6 The Future? 20
Challenges 21
Opportunities 22