INVESTING & DEVELOPING IN LONDON

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1 INVESTING & DEVELOPING IN LONDON Taking the Temperature Richard Yorke Director

2 Agenda Investment Market: Key Themes & Trends Occupier Market: Fundamentals Development Activity Outlook

3 Investment Key Themes & Trends Record year for the City

4 Record Year for the City Annual London City Office Investment 8bn in 2018 Source: CoStar UK As of Q4 2018

5 Pushes London Office Volume To Three-Year High Annual London Office Investment 19bn in 2018, up 12% Y-o-Y Source: CoStar UK As of Q4 2018

6 New Analytics Release Find Investment Hotspots Annual Office Sales Volume Heatmap Farringdon The Strand Moorgate & St Paul s Berkeley Sq City Midtown Fenchurch St Victoria West End Source: CoStar UK As of Jan 2019

7 Annual Volumes Have Doubled in Some Submarkets London Submarkets Ranked by Y-o-Y Sales Volume Growth Source: CoStar UK As of Jan 2019

8 Industrial Volumes Also Reached Three-Year High Annual London Industrial Investment Source: CoStar UK As of Q4 2018

9 Investment Key Themes & Trends Record year for the City Koreans & Singaporeans buying, Americans selling

10 Korean & Singaporean Investors Step Up Spending as Chinese/HK Spending Slows 20 Old Bailey Ropemaker Place Goldman Sachs HQ Month: June 2018 Buyer: Mirae AM Seller: Blackstone Month: June 2018 Buyer: Ho Bee Land Seller: AXA & Gingko Month: Jan 2019 Buyer: NPS Seller: Goldman Sachs Source: CoStar UK As of Jan 2019

11 Americans in Retreat North American Net Investment in London CRE 1.5 Net Investment ( bn) Q1 14 Q3 14 Q1 15 Q3 15 Q1 16 Q3 16 Q1 17 Q3 17 Q1 18 Q3 18 North American Net Investment Source: CoStar UK As of Q3 2018

12 Investment Key Themes & Trends Record year for the City Koreans & Singaporeans buying, Americans selling Deal numbers suggest underlying caution

13 Big Deals Masking Weaker Activity in London No of London Office Sales 1, No of London Office Deals 10-Year Average Source: CoStar UK As of Q4 2018

14 Investment Key Themes & Trends Record year for the City Koreans & Singaporeans buying, Americans selling Deal numbers suggest underlying caution Average yields flat in 2018, but gentle rises expected

15 Yields Expected to Rise from Current Low Levels London Office Yields Source: CoStar UK As of Jan 2019

16 The Occupier & Development Market

17 London Office Vacancy at Near 15-Year Low Net Absorption, Deliveries, Vacancy London Office Source: CoStar UK As of Jan 2019

18 Impact of Serviced Office Take-up on Smaller Buildings Central London Office Availability Rate in Buildings <20,000 SF WeWork takes first major London office at 199 Bishopsgate Source: CoStar UK As of Jan 2019

19 Development Focused on the City London Office Schemes Underway over 100,000 SF 22 Bishopsgate, 1.5m SF 100 Bishopsgate, 868,000 SF 100 Liverpool St, 530,000 SF Source: CoStar UK As of Jan 2019

20 Office Completions to Reach 15-Yr High in 2019 London Office Deliveries & Demolitions Source: CoStar UK As of Jan 2019

21 Lots of Pre-lets, But Lots of Moving Around Source: CoStar UK As of Q4 2018

22 Vacancies Up & Further Rent Losses Likely in City Core Vacancy & Average Rent London City Core North Offices Source: CoStar UK As of Jan 2019

23 London Industrial Market in a Strong Place Vacancy & Average Rent London Industrial Source: CoStar UK As of Jan 2019

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