GLOBAL PROPERTY MARKET CONFERENCE SPOTLIGHT ON LONDON. Forward thinking for a global city

Transcription

1 GLOBAL PROPERTY MARKET CONFERENCE SPOTLIGHT ON LONDON

2 Mar-00 Mar-01 Mar-02 Mar-03 Mar-04 Mar-05 Mar-06 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Balance of Responses, SA IN LONDON, EVERYONE IS CONFIDENT INDEX- SERIES AVERAGE = Source: DG ECFIN Economic Sentiment Index Services Confidence Indicator (RHS)

3 AS EMPLOYMENT IS SET TO GROW LONDON EMPLOYMENT LEVELS (000s) FORECASTS Per annum growth % 1023 Per annum growth % Per annum growth % Media & technology Financial & insurance Professional Services Total Services (RHS) Source: OEF (Inner London) 000s jobs projected to be added in the next 5 years

4 TENANTS LOOK FOR MORE SPACE ACTIVE DEMAND-BY SECTOR Q Q Q Q % 25% 12% 27% 29% 14% 10% 12% 9% 9% 9% 6% 9.2 m sq ft up since Q (9.0 m sq ft)

5 OR MOVE BACK INTO TOWN

6 WHICH ON THE FRINGE PUSHES 2009 RENTS Prime rental figures relate to new, high specification units of a standard size commensurate with demand in each location and reflect the market at the top end. KEY (psf) Less than plus KENSINGTON psf HAMMERSMITH psf PADDINGTON psf KNIGHTSBRIDGE psf EUSTON & MARYLEBONE psf NORTH OF OXFORD STREET psf MAYFAIR & ST JAMES S psf VICTORIA psf KING S CROSS psf CLERKENWELL & BLOOMSBURY SHOREDITCH psf psf SOHO & COVENT GARDEN psf MIDTOWN psf CITY CORE psf SOUTHBANK psf OUTER CORE psf ALDGATE & WHITECHAPEL psf CANARY WHARF psf DOCKLANDS psf *Central London Prime Office Rents as at December 2009

7 TO NEW LEVELS IN 2014 Prime rental figures relate to new, high specification units of a standard size commensurate with demand in each location and reflect the market at the top end. KEY (psf) Less than plus KENSINGTON psf HAMMERSMITH psf PADDINGTON psf KNIGHTSBRIDGE psf EUSTON & MARYLEBONE psf NORTH OF OXFORD STREET psf MAYFAIR & ST JAMES S psf VICTORIA psf KING S CROSS psf CLERKENWELL & BLOOMSBURY SHOREDITCH psf psf SOHO & COVENT GARDEN psf MIDTOWN psf CITY CORE psf SOUTHBANK psf OUTER CORE psf STRATFORD psf ALDGATE & WHITECHAPEL psf CANARY WHARF psf DOCKLANDS psf *Central London Prime Office Rents as at September 2014

8 BUT SUPPLY IS CONSTRAINED, SO MORE GROWTH EXPECTED CENTRAL LONDON DEVELOPMENT PIPELINE (sq ft) 8,000,000 FORECASTS 7,000, year average : 3.5 million sq ft x1.8 avg x1.8 avg x2.0 avg 6,000,000 5,000,000 4,000,000 x1.1 avg 3,000,000 2,000,000 x0.7 avg 1,000, Completed Under Construction Proposed - Definite Proposed - Likely Prelet Required UO/ Prelet

9 AND FOR CAPITAL, LONDON IS SURGING Private Equity Funds Pension Funds Insurance Funds Sovereign Wealth Fund London London London London Paris Copenhagen Paris Dubai Amsterdam Stockholm Munich Paris Munich Paris Manchester Frankfurt Prague Frankfurt Frankfurt Hamburg Manchester Brussels Dublin Moscow Berlin Gothenburg Zurich Aberdeen Geneva Madrid Hamburg Milan $0 $2 $4 $6 Year to June 14, $bn $0.0 $0.5 $1.0 $1.5 $2.0 Year to June 14, $bn Berlin Rome Helsinki Barcelona Stockholm Warsaw Brussels Milan Birmingham Munich Frankfurt Nice Reading Oslo Prague Amsterdam $0 $1 $2 $3 $4 $0 $2 $4 $6 $8 Year to June 14, $bn Year to June 14, $bn

10 Million WITH A COCKTAIL OF GLOBAL EQUITY INVESTMENT VOLUMES 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 Unknown Oceania South America Africa Middle East Asia North America Europe UK 2, YTD

11 PUSHING YIELDS TO 10 YEAR LOWS. HIGH V LOW YIELD SPREAD HIGH V LOW 10.00% 9.00% 8.00% 7.00% 6.00% 5.00% 4.00% 3.00% 2.00% 10 Year spread Current Yield

12 Prime yield BUT IT S THE SAME ELSEWHERE. HIGHS VS. LOWS OFFICE YIELD SPREAD 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 10 YR SPREAD Sep-14

13 Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Q Average House Prices HOUSE PRICES ARE RISING JUST UK AVERAGE RESIDENTIAL HOUSE PRICES LONDON UK

14 Dec-91 Sep-92 Jun-93 Mar-94 Dec-94 Sep-95 Jun-96 Mar-97 Dec-97 Sep-98 Jun-99 Mar-00 Dec-00 Sep-01 Jun-02 Mar-03 Dec-03 Sep-04 Jun-05 Mar-06 Dec-06 Sep-07 Jun-08 Mar-09 Dec-09 Sep-10 Jun-11 Mar-12 Dec-12 Sep-13 Jun-14 Prime Rent ITZA Prime Yield AND LUXURY RETAIL IS FLOURISHING PRIME RETAIL RENTS & YIELDS 7.00% % % % % Rent Yield 2.00% 1.00% %

15 AS LONDON GROWS THE NEW LONDON Birmingham Berks/Herts HS2 Crossrai l Brent Cross White City Kings Cross Stratford Reading /Thame s Valley Crossrai l Earls Court West End - Midtown City Southbank Canary Wharf Battersea Nine Elms Croydon Ebbsfleet

16 IS A WINNING CITY Global Business Hub Technology Hubs Tourism Appeal Innovation Cities Top City Office Markets Ranking of scale and services C&W Composite based on various studies C&W Number of tourist arrivals - Euromonitor 2014 Global Index By 2thinknow C&W Ranking 1 London London Hong Kong San Francisco New York 2 New York San Francisco Singapore New York Singapore 3 Tokyo Tel Aviv Bangkok London London 4 Shanghai New York London Boston Hong Kong 5 San Francisco Stockholm Macau Paris Paris 6 Seoul Berlin Kuala Lumpur Vienna Tokyo 7 Beijing Singapore Shenzhen Munich Boston 8 Toronto Bangalore New York Amsterdam Chicago 9 Hong Kong Boston Antalya Copenhagen San Francisco 10 Paris Seoul Paris Seattle Washington 11 Chicago Toronto Istanbul Toronto Zurich 12 Singapore Beijing Rome Seoul Stockholm

17 BUT HAS IT PEAKED?

18 GLOBAL PROPERTY MARKET CONFERENCE SPOTLIGHT ON LONDON