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EAST LONDON I ESSEX I NORTH LONDON & HERTFORDSHIRE I SOUTH EAST LONDON & KENTWELL PLACED PROPERTY ADVISORS
GLENNY DATABOOKQ3 2016
SEE THE WOOD. AND THE TREES.
EAST LONDON I ESSEX I NORTH LONDON & HERTFORDSHIRE I SOUTH EAST LONDON & KENTWELL PLACED PROPERTY ADVISORS
GLENNY DATABOOKQ3 2016
SEE THE WOOD. AND THE TREES.
HERTFORDSHIRE
NORTH LONDON
EAST LONDON
SOUTH EAST
LONDON
ESSEX
KENT
8-9
6-7
4-5
10-11
INTRODUCTION
Glenny LLP is the leading property consultancy and chartered surveying practice specialising in the region accessed by the North East and South East sections of the M25 motorway which we service through a network of strategically located of� ces in Essex (Basildon), East London (Stratford), North London and Hertfordshire (En� eld) and South East London and Kent (Bexley).
The statistics in this report relate to Glenny’s analysis of the property market as at the 30th September 2016, based on property data obtained through our respective of� ces servicing the area delineated on the map.
MARKET COMMENTARY
The vote to leave the EU was expected to trigger a decline in the economy and, in turn, a decline in demand for industrial and of� ce � oor space. The reality of the situation is that the economy has remained stronger than expected; the industrial and of� ce markets in our region have seen occupational demand strengthen resulting in rents for both prime and secondary property continuing to edge higher.
Take up in these markets has undoubtedly suffered but our analysis suggests that this was more a consequence of a shortage of supply, particularly for new and “Grade A” space, rather than a lack of interest on the part of the occupier.
Almost two thirds of the locations in the Glenny region have experienced double digital annualised rental growth over the past three years and this trend seems set to continue.
This rental growth story has become very compelling for investors with more than £1.1 billion of industrial assets being purchased in our marketplace over the past two years.
The over-riding message, therefore, is that despite some economic uncertainty the commercial property sector across the Glenny region remains ‘open for business’.
John BellHead of Business Space Agency and Investment
GLOSSARY
Market Availability – Relates to the amount of built stock on the market at the period end. The availability � gure does not include pre-let opportunities or new developments where construction is still ongoing.
Prime Investment Yield – The yield paid for an investment property let to an institutionally acceptable covenant for a lease term of 10-15 years at the current market rent.
Prime Rent – The rent achievable for the letting of a newly built property; typically for an industrial unit this would apply to a 20,000-25,000 sq ft building and for an of� ce letting, circa 5,000-10,000 sq ft.
Secondary Rent – The rent typically achievable on good quality second hand space in a particular location.
Prime Capital Values – The best freehold capital value achievable on the sale of a circa 10,000 sq ft industrial unit, or a circa 5,000 sq ft of� ce building to an owner occupier.
WELL PLACED FOR UNRIVALLEDREGIONALKNOWLEDGE
EAST LONDON
NORTH LONDON & HERTS
ESSEX
SOUTH EAST LONDON & KENT
2WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun 14
Jul-Dec14
Jan-Jun 15
Jul-Dec15
Jan-Jun16
Jul-Sep 16
0
100
200
300
400
500
INDUSTRIAL PRIME INVESTMENT YIELDS
Prime yields remained stable during the summer months, with investors maintaining a strong interest in prime distribution and industrial property. Industrial yields now average 5.19% across the Glenny region, with strong covenant, long income property in East London and North London & Herts expected to attract yields of 4.75%. Locations in Essex and South East London & Kent are expected to trade at slightly higher levels.
INDUSTRIAL SECTOR AT A GLANCE… OFFICE SECTOR AT A GLANCE…
OFFICE INVESTMENTMARKET TRANSACTIONS
Investment market activity in the of� ce sector slowed signi� cantly in the second and third quarters of 2016 after the strong activity recorded in q1. Total transactions for the year to date stand at £973m, with almost three quarters of the total transacted in the � rst three months of the year. The largest deal in the six months to the end of September was the £131m purchase of Columbus Courtyard E14 by the Chinese group HNA Investment Holdings. Chinese developer, Knight Dragon, also purchased the Mitre Building Greenwich for £60m.
OFFICE PRIME INVESTMENT YIELDS
Following a slight outward movement in the � rst three months of the year, average prime of� ce yields stabilised in the summer months at 6.11% although transaction levels slowed signi� cantly. Investments let to good covenants, with in excess of 10 years remaining on the lease, will still attract strong interest from investors. Overseas investors have been particularly active over the past six months, probably due to the weakness in £sterling following the EU exit vote.
OFFICE MARKET TAKE UP
Of� ce take up is expected to record its lowest annual total for three years in 2016, with total activity in the � rst nine months of the year standing at 1.8m sq ft. Most locations in the Glenny region have seen activity fall below their long run trend level of activity, the only exception to this being the North London & Herts market, where take up was boosted by the 148,600 sq ft sub let of EE’s former of� ces to Ocado at Hat� eld Business Park.
OFFICE MARKET RENTS
Prime rents rose in seven of the 12 locations featured in the new Glenny rent survey, resulting in average growth of 5.2% in the year to September 2016. As with the industrial market, a shortage of grade A supply has led to a stronger growth performance in secondary rents, which have risen by 9.0% over the comparable period. The strongest growth in secondary rents was seen in Braintree and En� eld, where rents were up by 25.7% and 23.3% respectively.
INDUSTRIAL INVESTMENTMARKET TRANSACTIONS
Investors have continued to favour industrial property in the � rst three quarters of 2016, with £422m of transactions completed in the Eastern M25 market. If the current trend continues into the � nal quarter of the year, overall investment levels are expected to rival 2015, which was a record year for transactions. The most signi� cant transaction in the six months to the end of September 2016 was Legal & General’s forward purchase of the 2.2m sq ft Amazon building at London Distribution Park, Tilbury for £150m, re� ecting a net initial yield of 5.25%.
INDUSTRIAL MARKET TAKE UP
Take up in the industrial market has maintained its overall trend level in the year to date but the total is distorted by the 2.2m sq ft pre let to Amazon at London Distribution Park. In general, take up has reduced, with lack of supply holding back the number of transactions completing, particularly at the larger (>50,000 sq ft) end of the market. Current demand has remained strong, with a total of 15.3m sq ft of requirements on the Glenny system.
INDUSTRIAL MARKET RENTS
The lack of grade A industrial � oor space across the Glenny region has seen prime rental growth slow over the past 12 months, with average growth of 4.3% across all Glenny locations. Occupiers have had to focus their attention on second hand space, causing secondary rents to grow at more than double the rate of the prime market values, up by 9.6% over the comparable period. The strongest growth in secondary rents has been seen in Dartford and our newly featured North London location, Tottenham/Edmonton.
000
SQ
FT
£PSF £PSF
£M’S
£M’S
000
SQ
FT
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun 14
Jul-Dec14
Jan-Jun 15
Jul-Dec15
Jan-Jun16
Jul-Sep 16
0
1,000
2,000
3,000
4,000
5,000
0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5
S E LONDON & KENT
ESSEX£9.25
£11.50
£16.00E LONDON DOCKLANDS
N LONDON & HERTS£12.00
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
2011 Q3 20162012 2013 2014 2015
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun 14
Jul-Dec14
Jan-Jun 15
Jul-Dec15
Jan-Jun16
Jul-Sep 16
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0 10 20 30 40 50
S E LONDON & KENT
ESSEX£26.00
£30.00
£47.50
£38.00
E LONDON DOCKLANDS
E LONDON (OTHER)
N LONDON & HERTS£22.00
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun 14
Jul-Dec14
Jan-Jun 15
Jul-Dec15
Jan-Jun16
Jul-Sep 16
0
500
1,000
1,500
2,000
2,500
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
2011 Q3 20162012 2013 2014 2015
DOCKLANDS PRIME OFFICE YIELD
AVERAGE PRIME OFFICE YIELD
10YR GILT YIELD AVERAGE PRIME OFFICE YIELD 10YR GILT YIELD
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 3
DEMANDSUPPLYMARKET COMMENT RENTS & CAPITAL VALUES
The announcement of the Amazon pre let of 2.2m sq ft at Roxhill and Forth Ports London Distribution Park Tilbury has dominated Essex industrial market activity in q3 2016. The deal is set to be Europe’s largest logistics pre let and the � rst four storey distribution centre in the UK.
In addition to the Tilbury pre let, Amazon also took a 125,000 sq ft unit at Bericote and Blackrock’s Tower Thurrock. The three unit scheme, which was speculatively built, has only one unit remaining, the 100,000 sq ft Unit 3.
Supply has continued to tighten, with total availability now under 2.2m sq ft. Grade A supply is dominated by four larger units, two at London Gateway and two at West Thurrock, which account for 97% of total grade A space on the market.
Demand remains strong, with total requirements now at the highest level on record for the Essex market at 10.5m sq ft. Larger requirements account for two thirds of the overall total, having risen by 78% from their q1 level. Mid range requirements (25,001-50,000 sq ft) registered the most signi� cant increase however, with total demand up by 85% to 1.9m sq ft.
INDUSTRIAL MARKET AVAILABILITY(as at September 2016)
INDUSTRIAL MARKET REQUIREMENTS(as at September 2016)
INDUSTRIAL MARKET DEMAND RENTS & CAPITAL VALUES INDUSTRIAL
NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
BASILDON £8.00 £6.75 £130
BRAINTREE £7.75 £5.75 £125
CHELMSFORD £8.75 £7.00 £140
THURROCK £9.25 £7.75 £150
INDUSTRIAL MARKET TAKE-UP INDUSTRIAL MARKET AVAILABILITY
INDUSTRIAL
TOTAL AVAILABILITY 2.2M SQ FT PERCENTAGE OF SQ FT DEMANDED
7%0–5,000
8%5,001–10,000
12%10,001–25,000
14%25,001–50,000
59%> 50,000
12%SUPPLY
3%0–5,000
4%5,001–10,000
9%10,001–25,000
18%25,001–50,000
66%> 50,000
61%DEMAND
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
0
500
1,000
1,500
2,000
2,500
158%TREND
000 SQ FT
10 yr average
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
000 SQ FT No.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
11,000
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
50
100
150
200
250
300
350
x%RENT
x%CAPVAL
0
2
4
6
8
10
£ SQ FT £ SQ FT
0.0%RENT
7.1%CAPVAL
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
20
40
60
80
100
120
140
160
ESSEX
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 4
DEMANDSUPPLY RENTS & CAPITAL VALUES
OFFICESESSEX
MARKET COMMENT
Following on from the record levels of activity recorded in 2015, when take up reached 500,000 sq ft over the year, the � rst three quarters of 2016 has seen activity levels fall below trend levels, with 183,500 sq ft of letting recorded. The most signi� cant transaction over the past nine months was the 30,000 sq ft pre let to Sky at St James Road, Brentwood.
Supply edged up slightly over the past two quarters, rising by 5% to 757,000 sq ft, largely due to 75,000 sq ft of grade A space coming to the market at Coval Wells, Chelmsford, of which 10,000 sq ft has been let. Hyatt Place Chelmsford offers the other major grade A accommodation, with 22,960 sq ft over four � oors, the top � oor having already been let.
Demand has recovered from the downturn which began in the second half of 2015, with current requirements standing at 520,000 sq ft, the highest level of demand since 2007/08. The most signi� cant change in demand has been seen at the larger end of the market, with requirements for buildings of 25,000 sq ft and above increasing.
Prime rents in both Chelmsford (£26.00 per sq ft) and Brentwood (£25.00 per sq ft) remained stable, although both Basildon and Braintree saw increases, with sentiment driving rents up by 3.6% and 6.7% to £17.00 per sq ft and £16.00 per sq ft respectively.
OFFICE MARKET REQUIREMENTS(as at September 2016)
OFFICE MARKET AVAILABILITY(as at September 2016)
OFFICE MARKET AVAILABILITYOFFICE MARKET TAKE-UP
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
BASILDON £17.00 £13.00 £200
BRAINTREE £16.00 £11.00 £200
BRENTWOOD £25.00 £17.00 £300
CHELMSFORD £26.00 £19.00 £325
OFFICE MARKET DEMANDS RENTS & CAPITAL VALUES OFFICE
TOTAL AVAILABILITY 0.8M SQ FT PERCENTAGE OF SQ FT DEMANDED
000 SQ FT
0
50
100
150
200
250
300
28%TREND
10 yr average
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
250
500
750
1,000
1,250
1,500
1,750
2,000
000 SQ FT No.
0
100
200
300
400
500
600
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
10
20
30
40
50
60
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
£ SQ FT £ SQ FT
0
5
10
15
20
25
30
0.0%RENT
12.1%CAPVAL
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
50
100
150
200
250
300
350
19%0–5,000
11%5,001–10,000
40%10,001–25,000
9%> 50,000
21%25,001–50,000
5%SUPPLY
11%0–5,000
9%5,001–10,000
23%10,001–25,000
24%> 50,000
33%25001–50,000
24%DEMAND
NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 5
DEMANDSUPPLY RENTS & CAPITAL VALUESMARKET COMMENT
Take up continued to be hindered by the lack of supply in the East London industrial market, with activity remaining below trend levels since the � rst half 2014. Activity in the year to the end of September 2016 has totalled 660,000 sq ft, 37% below the trend level of activity. The largest letting over the � rst three quarters of the year was the 232,965 sq ft letting to Coca Cola at Logic 233 Hindmans Way, Dagenham.
Supply has fallen below 1m sq ft for the � rst time on record, with only 708,500 sq ft of availability at the end of September 2016. Grade A supply stands at 86,000 sq ft, with the majority of stock (80%) at Standard Life and Ravenbourne’s Thames Gateway Park. A further 141,700 sq ft is under construction at the park, in three units. The overall availability rate now stands at 1.1%.
Demand continued to recover from the slowing in the second half of 2015, with a new record level of requirements recorded in the six months to September 2016, 9.1m sq ft. The main increase in requirements has been for units of 25,000 sq ft and above, where demand has risen by 38%.
Whilst prime rents have remained stable, the shortage of supply has seen secondary rents increase, with all areas recording an improvement. The most signi� cant rises were seen in Canning Town and Beckton, where values have increased by 12.0% and 9.5% respectively.
INDUSTRIAL MARKET REQUIREMENTS (as at September 2016)
INDUSTRIAL MARKET AVAILABILITY(as at September 2016)
INDUSTRIAL MARKET AVAILABILITYINDUSTRIAL MARKET TAKE-UP INDUSTRIAL MARKET DEMAND RENTS & CAPITAL VALUES INDUSTRIAL
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
BARKING / DAGENHAM £13.00 £9.50 £200
BECKTON /ROYALS £13.50 £11.50 £210
ROMFORD £10.50 £8.50 £140
STRATFORD / CANNING TOWN £16.00 £14.00 £275
TOTAL AVAILABILITY 0.7M SQ FT PERCENTAGE OF SQ FT DEMANDED
9%0–5,000
20%5,001–10,000
35%10,001–25,000
36%25,001–50,000
47%SUPPLY
3%0–5,000
4%5,001–10,000
11%10,001–25,000
20%25,001–50,000
62%> 50,000
29%DEMAND
000 SQ FT
0
200
400
600
800
1,000
1,200
1,400
10 yr average
37%TREND
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
1,000
2,000
3,000
4,000
5,000
6,000
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
000 SQ FT No.
0
50
100
150
200
250
300
£ SQ FT £ SQ FT
0.0
2.5
5.0
7.5
10.0
12.5
15.0
17.5
0.0%RENT
0.0%CAPVAL
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
50
100
150
200
250
300
INDUSTRIAL
NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
EAST LONDON
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 6
DEMANDSUPPLY RENTS & CAPITAL VALUES
EAST LONDON
MARKET COMMENT
Take up in both Docklands and the rest of the East London of� ce market has fallen below trend levels of activity in the � rst three quarters of 2016, with Docklands recording activity of 650,000 sq ft for the nine months and the rest of the East London of� ce market 290,000 sq ft.
Docklands activity has been dominated by the 316,000 sq ft letting to Thomson Reuters at 5 Canada Square in q1, with the largest deal in the East London market being the 53,500 sq ft letting to technology incubator company ENTIQ at Here East in the Queen Elizabeth Park.
The supply of grade A stock in the rest of East London market has been boosted by the release of stock at Here East, Queen Elizabeth Olympic Park, with both the former International Broadcast Centre and the Press Centre coming to the market. These two buildings provide approximately 360,000 sq ft of of� ce and TMT studio space.
Demand has edged back up to 577,500 sq ft following the satisfaction of the FCA and TfL requirements in mid 2015. A number of larger requirements have boosted overall demand, although smaller requirements have weakened, probably as a response to increased uncertainty following the vote to leave the EU.
DOCKLANDS OTHER
OFFICE MARKET AVAILABILITY(as at September 2016)
OFFICE MARKET REQUIREMENTS(as at September 2016)
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
BARKING / DAGENHAM £16.00 £13.50 £175
ROYALS £32.50 £21.00 £650
ROMFORD £14.50 £11.00 £190
STRATFORD £38.00 £20.00 £750
OFFICE MARKET TAKE-UP OFFICE MARKET AVAILABILITY OFFICE MARKET DEMAND RENTS & CAPITAL VALUES OFFICE
TOTAL AVAILABILITY 1.9M SQ FT PERCENTAGE OF SQ FT DEMANDED
7%0–5,000 7%
5,001–10,000
12%10,001–25,000
12%25,001–50,000
62%> 50,000
23%SUPPLY
11%0–5,000
10%5,001–10,000
25%10,001–25,000
22%25,001–50,000
32%> 50,000
25%DEMAND
000 SQ FT
0
100
200
300
400
500
600
700
800
900
Other 10 yr average
Docklands 10 yr average
22%TREND
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
OFFICE MARKET TAKE-UP000 SQ FT000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
500
1,000
1,500
2,000
2,500
3,000
3,500
OFFICE MARKET AVAILABILITY000 SQ FT No.
0
250
500
750
1,000
1,250
1,500
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
10
20
30
40
50
60
0
10
20
30
40
50
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
£ SQ FT £ SQ FT
0
100
200
300
400
500
600
700
800
0.0%RENT
0.0%CAPVAL
RENTS & CAPITAL VALUES OFFICE
OFFICES
NO OF REQS (RHS)000 SQ FT DOCKLANDSOTHERS CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 7
DEMANDSUPPLY RENTS & CAPITAL VALUESMARKET COMMENT
Constricted supply has continued to affect the take up numbers, which are expected to fall below trend for the second successive year in 2016. Activity in the � rst nine months of the year reached 954,000 sq ft. There were a number of signi� cant sized transactions which contributed to a strong third quarter, such as the two pre lets at En� eld Distribution Park, with Cooks Delight taking 50,000 sq ft and DFS a further 44,500 sq ft.
Supply edged up slightly to 2.2m sq ft. Overall availability is boosted by several larger units that came to the market although more than 54% of larger units are located in Harlow. The availability rate remains close to its recent low point at 3.7%.
Demand continued to be strong, surpassing the previous peak level of 9.5m sq ft at the end of 2014. Overall demand in the six months to September 2016 was recorded at 10.2m sq ft, with more than 83% of requirements for units of 25,000 sq ft and above. Requirements for units below 25,000 sq ft eased slightly.
Both prime and secondary rents increased in the two inner M25 markets of En� eld and Tottenham/Edmonton rising by 15.0% and 9.1% respectively. Outer M25 rents remained stable at their q1 2016 levels.
INDUSTRIAL MARKET AVAILABILITYINDUSTRIAL MARKET TAKE-UP
INDUSTRIAL MARKET AVAILABILITY(as at September 2016)
INDUSTRIAL MARKET DEMAND
INDUSTRIAL MARKET REQUIREMENTS(as at September 2016)
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
ENFIELD £11.50 £9.50 £200
HARLOW £7.75 £6.75 £140
HODDESDON £8.50 £6.50 £135
TOTTENHAM /EDMONTON £12.00 £10.00 £200
RENTS & CAPITAL VALUES INDUSTRIAL
TOTAL AVAILABILITY 2.2M SQ FT PERCENTAGE OF SQ FT DEMANDED
7%0–5,000
8%5,001–10,000
14%10,001–25,000
20%25,001–50,000
51%> 50,000 16%
SUPPLY
3%0–5,000 4%
5,001–10,000
10%10,001–25,000
18%25,001–50,000
65%> 50,000
12%DEMAND
0
250
500
750
1,000
1,250
25%TREND
000 SQ FT
10 yr average
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
1,000
2,000
3,000
4,000
5,000
6,000
0
2,000
4,000
6,000
8,000
10,000
12,000
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
No.
0
50
100
150
200
250
300
350
0
2
4
6
8
10
12
14
£ SQ FT £ SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
50
100
150
200
250
20.0% 0.0%RENT CAPVAL
INDUSTRIAL
NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
NORTH LONDON & HERTS
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 8
OFFICE MARKET AVAILABILITY(as at September 2016)
DEMANDSUPPLY RENTS & CAPITAL VALUES
OFFICE MARKET REQUIREMENTS (as at September 2016)
NORTH LONDON & HERTS
MARKET COMMENT
Unlike most other of� ce markets in the Glenny region, North London and Herts saw take up exceed the trend level of activity in the � rst half of the year, due primarily to Ocado sub letting 148,600 sq ft at Hat� eld Business Park from mobile phone operator EE.
Supply has continued on a downward trajectory, falling below 1m sq ft for the � rst time since 2006. Total availability at the end of September 2016 stood at 890,000 sq ft, which equates to an availability rate of 3.8%.
Demand has continued to improve, rising to 504,000 sq ft in the six months to the end of September 2016. Several larger requirements have boosted the overall demand for space, although there has been a signi� cant weakening in requirements of buildings of less than 25,000 sq ft.
Prime rents have continued to rise, with of� ce rents in En� eld having increased by 33% over the past 12 months from £18.50 per sq ft to £22.00 per sq ft. Secondary rents in En� eld have followed a similar trend, rising by 23% since mid 2015.
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
ENFIELD £22.00 £18.50 £275
HARLOW £15.00 £11.00 £200
HODDESDON £16.00 £12.00 £200
WELWYN GARDEN CITY £18.00 £15.00 £250
OFFICE MARKET AVAILABILITYOFFICE MARKET TAKE-UP OFFICE MARKET DEMAND RENTS & CAPITAL VALUES OFFICE
TOTAL AVAILABILITY 0.9M SQ FT PERCENTAGE OF SQ FT DEMANDED
12%0–5,000
12%5,001–10,000
31%10,001–25,000
24%25,001–50,000
21%> 50,000
28%SUPPLY
10%0–5,000
9%5,001–10,000
16%10,001–25,000
40%25,001–50,000
25%> 50,000
7%DEMAND
000 SQ FT
0
50
100
150
200
250
300
350
6%TREND
10 yr average
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
500
1,000
1,500
2,000
2,500
3,000
000 SQ FT No.
0
100
200
300
400
500
600
700
800
900
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
10
20
30
40
50
60
0.0
2.5
5.0
7.5
10.0
12.5
15.0
17.5
20.0
22.5
18.9%RENT CAPVAL
10.0%
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
50
100
150
200
250
300
£ SQ FT £ SQ FT
OFFICES
NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 9
DEMANDSUPPLY RENTS & CAPITAL VALUES
SOUTH EAST LONDON & KENT
MARKET COMMENT
Take up has slowed over the � rst three quarters of 2016 as uncertainty about the economic outlook and reduced supply impacted on occupier activity. Transactions totalled 1.1m sq ft for the nine months, signi� cantly below trend levels of activity.
The most signi� cant transaction in the six months to the end of September 2016 was the 116,650 sq ft letting to DX Network Services at The Interchange Swanley. A further 108,000 sq ft was let at Graviton Park Belvedere to Amazon.
Supply has tightened further, falling below 3m sq ft for the � rst time since 2006, ending q3 2016 at 2.9m sq ft. Grade A space increased slightly, rising to 629,360 sq ft, with more than 60% of stock in larger units. The largest grade A unit on the market is the 180,000 sq ft former Dixons Carphone Warehouse Erith 180. The availability rate stands at 2.6% at the end of September 2016.
Demand continued to recover, with total requirements of 6.6m sq ft in the six months to September 2016, but remains 19% below the recent peak recorded in 2014. The key driver to the upturn in demand has been the increase in requirements for units of 25,000 sq ft and above, where demand is up by 25% from the previous period.
INDUSTRIAL MARKET REQUIREMENTS(as at September 2016)
INDUSTRIAL MARKET AVAILABILITY(as at September 2016)
INDUSTRIAL MARKET AVAILABILITYINDUSTRIAL MARKET TAKE-UP INDUSTRIAL MARKET DEMAND RENTS & CAPITAL VALUES INDUSTRIAL
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
ASHFORD £8.50 £5.50 £100
CHARLTON/WOOLWICH £11.00 £9.50 £155
DARTFORD £11.00 £9.50 £155
MAIDSTONE £7.25 £6.50 £135
TOTAL AVAILABILITY 2.9M SQ FT PERCENTAGE OF SQ FT DEMANDED
12%0–5,000
17%5,001–10,000
26%10,001–25,000
14%25,001–50,000
31%> 50,000
21%SUPPLY
3%0–5,000 5%
5,001–10,000
11%10,001–25,000
25%25,001–50,000
56%> 50,000
6%DEMAND
000 SQ FT
0
250
500
750
1,000
1,250
1,500
1,750
2,000
10 yr average
46%TREND
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
000 SQ FT No.
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
50
100
150
200
250
300
350
400
0
2
4
6
8
10
12
£ SQ FT £ SQ FT
4.5%RENT
3.3%CAPVAL
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
25
50
75
100
125
150
175
INDUSTRIAL
NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 10
DEMANDSUPPLY RENTS & CAPITAL VALUESMARKET COMMENT
Following on from the strong years activity in 2015, when more than 1m sq ft was let, take up has slowed in the � rst three quarters of 2016, with only 350,000 sq ft transacted. Only four transactions above 10,000 sq ft have been completed, the largest being the 20,950 sq ft letting to The Compass Company at Catford Road SE6.
Availability has fallen to its lowest level in 10 years as permitted development has reduced the supply in a number of locations. Total stock on the market stood at 1.4m sq ft at the end of q3 2016. Grade A availability represents only 8% of total supply, with the largest grade A building on the market being Boultbee Brooks Northside House, Bromley, where 24,840 sq ft is available.
Demand continued to recover from the downturn in the latter half of 2015, recording 453,000 sq ft in the six months to September 2016. This is the highest level of requirements registered since the recent peak of 740,000 sq ft in 2013/14.
Prime of� ce rents have moved higher, rising across all locations, with the most signi� cant increase being seen in Bromley, where rents were up by 19.0%. Secondary rents also improved, increasing by 13.7% on average.
OFFICE MARKET REQUIREMENTS(as at September 2016)
OFFICE MARKET AVAILABILITY(as at September 2016)
OFFICE MARKET AVAILABILITYOFFICE MARKET TAKE-UP OFFICE MARKET DEMAND RENTS & CAPITAL VALUES OFFICE
£ PSFRENTS
CAPITALVALUES
PRIME SECONDARY PRIME
BROMLEY £25.00 £16.00 £280
DARTFORD £25.00 £15.00 £265
GREENWICH £30.00 £15.00 £300
MAIDSTONE £20.00 £12.00 £225
TOTAL AVAILABILITY 1.4M SQ FT PERCENTAGE OF SQ FT DEMANDED
24%0–5,000
20%5,001–10,000
29%10,001–25,000
11%25,001–50,000
16%> 50,000
10%SUPPLY
8%0–5,000
10%5,001–10,000
17%10,001–25,000
15%25,001–50,000
50%> 50,000
59%DEMAND
000 SQ FT
0
100
200
300
400
500
600
700
800
10 yr average
35%TREND
Jan-Jun12
Jul-Dec 12
Jan-Jun 13
Jul-Dec13
Jan-Jun14
Jul-Dec14
Jan-Jun15
Jul-Dec15
Jan-Mar16
Jul-Sep 16
000 SQ FT
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
0
500
1,000
1,500
2,000
2,500
3,000
3,500
0
100
200
300
400
500
600
700
800
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
000 SQ FT No.
0
5
10
15
20
25
30
35
40
45
50
£ SQ FT £ SQ FT
0
5
10
15
20
25
30
35
RENT CAPVAL11.1% 3.4%
0
50
100
150
200
250
300
350
Sep16
Jun 12
Dec12
Jun13
Dec13
Jun14
Dec14
Jun15
Dec15
Jun16
OFFICES
NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)POOR 2ND HAND GOOD 2ND HAND GRADE A
SOUTH EAST LONDON & KENT
WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2016 11
GLENNY DATABOOKQ3 2016
WELL PLACED PROPERTY ADVISORS
This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Glenny LLP as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information or forecasting opinions set out herein for the purpose of any particular transaction, and no responsibility or reliability, whether in negligence or otherwise, is accepted by Glenny LLP or by any of its members, of� ces, employees, agents or representatives for any direct, indirect consequential loss or damage which may result from any such reliance or other use thereof.
All rights reserved. No part of this publication may be transmitted or reproduced in any material form by any means, electronic, recording, mechanical, further copying or otherwise, or stored in any information storage or retrieving system of any nature, without prior written permission of the copyright holder except in accordance with the provisions of the Copyright Design and Patent Act 1988.
Warning: the doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution November 2016.
CONTACTEAST LONDON
Peter Higgins - 020 8591 6671 Fifth Floor, Unex Tower, Station Street, Stratford, London E15 1DA
ESSEX
Jim O’Connell - 01268 540 771 3 Argent Court, Sylvan Way, Basildon, Essex SS15 6TH
DEVELOPMENT & INVESTMENT
John Bell and James McFeely - 020 8591 6671Fifth Floor, Unex Tower, Station Street, Stratford, London E15 1DA
RESEARCH
For more information email research@glenny.co.uk
NORTH LONDON & HERTS
Ivan Scott - 020 8367 23341 Cross� eld Chambers, Gladbeck Way, En� eld, Middlesex EN2 7HR
SOUTH EAST LONDON & KENT
Richard Seton-Clements - 020 8304 4911 21 Bourne Road, Bexley, Kent DA5 1LW
HERTFORDSHIRE
NORTH LONDON
EAST LONDON
SOUTH EAST
LONDON
ESSEX
KENT
3
4
1
2
1
3
5
6
4
21
1
2
3
4
5
23
4
5
OFFICE RENT CAPITAL VALUES
1 STRATFORD £38.00 £750
2 ROYALS £32.50 £650
3 BARKING / DAGENHAM / RAINHAM £16.00 £175
4 ROMFORD £14.50 £190
2 ENFIELD £22.00 £275
3 WELWYN GARDEN CITY £18.00 £250
4 HODDESDON / CHESHUNT £16.00 £200
5 HARLOW £15.00 £200
1 BRAINTREE £16.00 £200
2 CHELMSFORD £26.00 £325
3 BRENTWOOD £25.00 £300
4 BASILDON £17.00 £200
1 GREENWICH £30.00 £300
3 BROMLEY £25.00 £280
4 DARTFORD £25.00 £265
5 MAIDSTONE £20.00 £225
INDUSTRIAL RENT CAPITAL VALUES
1 CANNING TOWN £16.00 £275
2 BECKTON £13.50 £210
3 BARKING / DAGENHAM / RAINHAM £13.00 £200
4 ROMFORD £10.50 £140
1 TOTTENHAM / EDMONTON £12.00 £200
2 ENFIELD £11.50 £200
4 HODDESDON / CHESHUNT £8.50 £135
5 HARLOW £7.75 £140
1 BRAINTREE £7.75 £125
2 CHELMSFORD £8.75 £140
4 BASILDON £8.00 £130
5 THURROCK £9.25 £150
2 CHARLTON / WOOLWICH £11.00 £155
4 DARTFORD £11.00 £155
5 MAIDSTONE £7.25 £135
6 ASHFORD £8.50 £100
KEY: CHANGES IN THE PAST 6 MONTHS
INCREASE DECREASENO CHANGE
RENTS AND VALUES
MARKET COMMENT
A lack of supply of grade A space in both the industrial and of� ce sectors has held back the growth in prime rents over the past 12 months. Prime of� ce rents grew by 5.2% in the year to the end of q3 2016, compared to 14.2% a year earlier. Industrial prime rental growth eased back to 4.6% from 10.8% one year earlier. The shortages in supply, however, have seen secondary rents gather momentum, with of� ce secondary rents up by 9.0% and industrial rents up by 9.6%.
Whilst a number of locations saw prime rents remain stable, secondary rents increased in 88% of the industrial locations in the Glenny rent survey, whilst secondary of� ce rents increased in 69% of locations.
GLENNY DATABOOKQ3 2016
WELL PLACED PROPERTY ADVISORS
This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Glenny LLP as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information or forecasting opinions set out herein for the purpose of any particular transaction, and no responsibility or reliability, whether in negligence or otherwise, is accepted by Glenny LLP or by any of its members, of� ces, employees, agents or representatives for any direct, indirect consequential loss or damage which may result from any such reliance or other use thereof.
All rights reserved. No part of this publication may be transmitted or reproduced in any material form by any means, electronic, recording, mechanical, further copying or otherwise, or stored in any information storage or retrieving system of any nature, without prior written permission of the copyright holder except in accordance with the provisions of the Copyright Design and Patent Act 1988.
Warning: the doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution November 2016.
CONTACTEAST LONDON
Peter Higgins - 020 8591 6671 Fifth Floor, Unex Tower, Station Street, Stratford, London E15 1DA
ESSEX
Jim O’Connell - 01268 540 771 3 Argent Court, Sylvan Way, Basildon, Essex SS15 6TH
DEVELOPMENT & INVESTMENT
John Bell and James McFeely - 020 8591 6671Fifth Floor, Unex Tower, Station Street, Stratford, London E15 1DA
RESEARCH
For more information email research@glenny.co.uk
NORTH LONDON & HERTS
Ivan Scott - 020 8367 23341 Cross� eld Chambers, Gladbeck Way, En� eld, Middlesex EN2 7HR
SOUTH EAST LONDON & KENT
Richard Seton-Clements - 020 8304 4911 21 Bourne Road, Bexley, Kent DA5 1LW
EAST LONDON
ESSEX
KENT
SOUTH EAST
LONDON
NORTH LONDON
HERTFORDSHIRE
PRIME YIELDS
NORTH LONDON & HERTSKEY DEAL
Elizabeth French House Langston Road Loughton - Salaft Properties agreed a sale & leaseback of Kier Construction’s of� ces in Loughton. Salaft paid £6.5m for the 17,125 sq ft of� ces, with the purchase price representing a net initial yield of 5.44% off a rent of £22.00 per sq ft.
SOUTH EASTLONDON & KENT KEY DEAL
Graviton Park Belvedere – CBRE Global Investors purchased the recently completed three unit development from Wrenbridge Land and Palmer Capital Partners for £15.1m. The development was purchased vacant, with a letting of the entire 108,000 sq ft buildings achieved shortly after purchase.
ESSEXKEY DEAL
Amazon Ful� lment Centre London Distribution Park Tilbury – Legal & General Property purchased the 2.2m sq ft distribution unit for £150m in August 2016 from Roxhill Developments and Forth Ports, the purchase price representing a net initial yield of 5.25%. Amazon signed an agreement to lease earlier in the month, with the new building the � rst four storey distribution centre in the UK.
PRIME OFFICE YIELDS
PRIME INDUSTRIAL YIELDS
PRIME INDUSTRIAL YIELDS
PRIME INDUSTRIAL YIELDS
PRIME OFFICE YIELDS
YEAR YEAR
YEAR YEAR
PRIME OFFICE YIELDS
YEAR
YEAR
EAST LONDON KEY DEAL
17 Columbus Courtyard, E14 – Chinese conglomerate HNA Group purchased the 195,500 sq ft Columbus Courtyard building for £131m from Vico Capital. The building is leased to Credit Suisse until 2024, with the tenant having the option to extend for a further 15 years at the end of the term. The purchase price re� ected a net initial yield of 4.59%.
PRIME OFFICE YIELDS
EAST LONDON – OTHER DOCKLANDS
YEAR
PRIME INDUSTRIAL YIELDS
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
06 Q3 201607 08 09 10 11 12 13 14 15
NORTH LONDON
4.75%Q3 2016
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
06 Q3 201607 08 09 10 11 12 13 14 15
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
06 Q3 201607 08 09 10 11 12 13 14 15
6.45%Q3 2016
6.00%Q3 2016
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
06 Q3 201607 08 09 10 11 12 13 14 15
ESSEX
5.75%Q3 2016
06 Q3 201607 08 09 10 11 12 13 14 15
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
SE LONDON AND KENT
06 Q3 201607 08 09 10 11 12 13 14 15
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
6.50%Q3 2016
5.50%Q3 2016
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
06 Q3 201607 08 09 10 11 12 13 14 15
EAST LONDON
4.75%Q3 2016
3.5%
4.5%
5.5%
6.5%
7.5%
8.5%
9.5%
06 Q3 201607 08 09 10 11 12 13 14 15
4.75%Q3 2016
DOCKLANDS
5.50%Q3 2016
OTHER
SPECIALISTADVICEAT EVERY STAGEOF THE PROPERTY LIFE CYCLE
ESSEX Jim O’Connell
01268 540 771
j.oconnell@glenny.co.uk
3 Argent Court, Sylvan Way, Basildon, Essex SS15 6TH
SOUTH EAST LONDON & KENT Richard Seton-Clements
020 8304 4911
r.clements@glenny.co.uk
21 Bourne Road, Bexley, Kent DA5 1LW
EAST LONDON Peter Higgins
020 8591 6671
p.higgins@glenny.co.uk
Fifth Floor, Unex Tower, Station StreetStratford, London E15 1DA
NORTH LONDON & HERTSIvan Scott
020 8367 2334
i.scott@glenny.co.uk
1 Cross� eld Chambers, Gladbeck Way, En� eld, Middlesex EN2 7HR
RESEARCH For more information email research@glenny.co.uk
DEVELOPMENT & INVESTMENT John Bell and James McFeely
020 8591 6671
j.bell@glenny.co.uk / j.mcfeely@glenny.co.uk
Fifth Floor, Unex Tower, Station StreetStratford, London E15 1DA
Q3 2016
RESEARCH
ARCHITECTURE
ASSET & PROPERTYMANAGEMENT
BUILDING CONSULTANCY
BUSINESS SPACE AGENCY
INVESTMENT
RESIDENTIAL DEVELOPMENT
REGENERATION & INFRASTRUCTURE
DEVELOPMENT
RESIDENTIAL MANAGING AGENTS
VALUATIONSERVICES
LEASE ADVISORY
This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Glenny LLP as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information or forecasting opinions set out herein for the purpose of any particular transaction, and no responsibility or reliability, whether in negligence or otherwise, is accepted by Glenny LLP or by any of its members, of� ces, employees, agents or representatives for any direct, indirect consequential loss or damage which may result from any such reliance or other use thereof.
All rights reserved. No part of this publication may be transmitted or reproduced in any material form by any means, electronic, recording, mechanical, further copying or otherwise, or stored in any information storage or retrieving system of any nature, without prior written permission of the copyright holder except in accordance with the provisions of the Copyright Design and Patent Act 1988.
Warning: the doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution. November 2016.
GREATER LONDONINDUSTRIAL
Glenny
SOUTH EAST OF ENGLAND
(EXCL. LONDON)
INDUSTRIAL
Glenny
REGIONAL RUNNER UP
STRATEGIC PLANNING
SPECIALISTADVICEAT EVERY STAGEOF THE PROPERTY LIFE CYCLE
ESSEX Jim O’Connell
01268 540 771
j.oconnell@glenny.co.uk
3 Argent Court, Sylvan Way, Basildon, Essex SS15 6TH
SOUTH EAST LONDON & KENT Richard Seton-Clements
020 8304 4911
r.clements@glenny.co.uk
21 Bourne Road, Bexley, Kent DA5 1LW
EAST LONDON Peter Higgins
020 8591 6671
p.higgins@glenny.co.uk
Fifth Floor, Unex Tower, Station StreetStratford, London E15 1DA
NORTH LONDON & HERTSIvan Scott
020 8367 2334
i.scott@glenny.co.uk
1 Cross� eld Chambers, Gladbeck Way, En� eld, Middlesex EN2 7HR
RESEARCH For more information email research@glenny.co.uk
DEVELOPMENT & INVESTMENT John Bell and James McFeely
020 8591 6671
j.bell@glenny.co.uk / j.mcfeely@glenny.co.uk
Fifth Floor, Unex Tower, Station StreetStratford, London E15 1DA
Q3 2016
RESEARCH
ARCHITECTURE
ASSET & PROPERTYMANAGEMENT
BUILDING CONSULTANCY
BUSINESS SPACE AGENCY
INVESTMENT
RESIDENTIAL DEVELOPMENT
REGENERATION & INFRASTRUCTURE
DEVELOPMENT
RESIDENTIAL MANAGING AGENTS
VALUATIONSERVICES
LEASE ADVISORY
This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Glenny LLP as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information or forecasting opinions set out herein for the purpose of any particular transaction, and no responsibility or reliability, whether in negligence or otherwise, is accepted by Glenny LLP or by any of its members, of� ces, employees, agents or representatives for any direct, indirect consequential loss or damage which may result from any such reliance or other use thereof.
All rights reserved. No part of this publication may be transmitted or reproduced in any material form by any means, electronic, recording, mechanical, further copying or otherwise, or stored in any information storage or retrieving system of any nature, without prior written permission of the copyright holder except in accordance with the provisions of the Copyright Design and Patent Act 1988.
Warning: the doing of an unauthorised act in relation to a copyright work may result in both a civil claim for damages and criminal prosecution. November 2016.
GREATER LONDONINDUSTRIAL
Glenny
SOUTH EAST OF ENGLAND
(EXCL. LONDON)
INDUSTRIAL
Glenny
REGIONAL RUNNER UP
STRATEGIC PLANNING
SPECIALISTADVICEAT EVERY STAGEOF THE PROPERTY LIFE CYCLE
ESSEX Jim O’Connell
01268 540 771
j.oconnell@glenny.co.uk
3 Argent Court, Sylvan Way, Basildon, Essex SS15 6TH
SOUTH EAST LONDON & KENT Richard Seton-Clements
020 8304 4911
r.clements@glenny.co.uk
21 Bourne Road, Bexley, Kent DA5 1LW
EAST LONDON Peter Higgins
020 8591 6671
p.higgins@glenny.co.uk
Fifth Floor, Unex Tower, Station StreetStratford, London E15 1DA
NORTH LONDON & HERTSIvan Scott
020 8367 2334
i.scott@glenny.co.uk
1 Cross� eld Chambers, Gladbeck Way, En� eld, Middlesex EN2 7HR
RESEARCH For more information email research@glenny.co.uk
DEVELOPMENT & INVESTMENT John Bell and James McFeely
020 8591 6671
j.bell@glenny.co.uk / j.mcfeely@glenny.co.uk
Fifth Floor, Unex Tower, Station StreetStratford, London E15 1DA
Q3 2016
RESEARCH
ARCHITECTURE
ASSET & PROPERTYMANAGEMENT
BUILDING CONSULTANCY
BUSINESS SPACE AGENCY
INVESTMENT
RESIDENTIAL DEVELOPMENT
REGENERATION & INFRASTRUCTURE
DEVELOPMENT
RESIDENTIAL MANAGING AGENTS
VALUATIONSERVICES
LEASE ADVISORY
This document is for general informative purposes only. The information in it is believed to be correct, but no express or implied representation or warranty is made by Glenny LLP as to its accuracy or completeness, and the opinions in it constitute our judgement as of this date but are subject to change. Reliance should not be placed upon the information or forecasting opinions set out herein for the purpose of any particular transaction, and no responsibility or reliability, whether in negligence or otherwise, is accepted by Glenny LLP or by any of its members, of� ces, employees, agents or representatives for any direct, indirect consequential loss or damage which may result from any such reliance or other use thereof.
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GREATER LONDONINDUSTRIAL
Glenny
SOUTH EAST OF ENGLAND
(EXCL. LONDON)
INDUSTRIAL
Glenny
REGIONAL RUNNER UP
STRATEGIC PLANNING
DEMAND REACHES RECORD LEVELS AFTER BREXIT VOTE
Demand for industrial floorspace reached record levels in the months following the BREXIT vote, according to our latest research.
John Bell, Head of Business Space and Investment Agency at Glenny, said;
“Our expectations were that demand would slow following the vote to leave the EU but in reality quite the opposite happened. As agents, the biggest issue we face at the moment is how to satisfy this pent up demand as stock levels continue to dwindle. This, in part, is due to a resistance within the institutional sector to fund speculative development; the obvious conundrum being what a hard Brexit might actually mean to the commercial property sector; right now it’s all still conjecture, uncertainty and sentiment.”
To put things into context, our research demonstrates that over the past six months demand for industrial floor space has risen to 15.3m sq ft with requirements for buildings of 25,000 sq ft upwards accounting for 80% of this total. Bell adds;
“The resurgence in demand has been driven by occupiers looking for units in the “mid” and “big box” size brackets, particularly amongst the e-tail and home delivery sectors within the M25. At the smaller end of the market, demand has remained steady but has not bounced back to the same extent. This is not unusual as many smaller requirements don’t make it on to agents’ registers.”
GLENNY NEWS21st November 2016
14,000
,000 sq ft
2008 2009 2010 2011 2012 2013 2014 2015 2016
12,000
10,000
8,000
6,000
4,000
2,000
0
> 25,000 sq ft
< 25,000 sq ft
www.glenny.co.uk
GLENNY NEWS21st November 2016
For more information contact
John BellHead of Business Space & Investment Agency
020 3141 3500j.bell@glenny.co.uk
Established in 1892 Glenny LLP offers services across the whole property lifecycle, operating from five strategic offices servicing clients regionally and nationally.
Glenny’s Business Space Agency team offers unrivalled regional knowledge of the east London, Essex, North London and Herts and South East London and Kent commercial property markets.
www.glenny.co.uk
It’s not just about size though - we also need to look at tenure. Most new product being delivered to the market of late has been leasehold due to the maturity of this asset class and the desire of institutional investors to hold this stock; freeholds remain in very scarce supply across all size ranges and grades, despite the premium values an occupier would be willing to pay as a consequence of the current low interest rate environment.
On the other side of the equation supply has continued to reduce and the overall availability level now stands at 8m sq ft across the Glenny region with about 26% of this in Garde A space - 2.1m sq ft. The mismatch between supply and demand has driven up rental values in most of our research locations, with some hot-spots seeing prime rents grow by as much as 50% over the past three years.
Bell comments:
“The rental growth story in many of our locations has become very compelling. Prime rents in many of our research towns have risen above £10.00 per sq ft but the shortage of grade A stock in most markets has had an even larger impact on better quality second hand stock.”
An example of this is in Canning Town, where prime rents have risen by 52% (or 15% per annum) over the past three years whilst secondary rents are up by 20% per annum. This is not an isolated incidence, with almost two thirds of the locations in the Glenny regions survey experiencing annualised growth in double digits over the past three years.
Bell states;
“This is a very strong story for investors and some have already committed to the area, with more than £1.1bn of industrial assets being purchased in the Glenny region over the past two years. The most recent examples of this trend have been Legal and General’s purchase of Amazon’s new 2.2m sq ft fulfilment centre at London Distribution Park in Tilbury and CBRE Global Investors’ purchase of Wrenbridge and Palmer Capital’s Graviton Park in Belvedere.”
The rental growth story looks set to continue for the foreseeable future and any new schemes are likely to be met with strong demand from both occupiers and investors.
Glenny LLP
21st November 2016
www.glenny.co.uk
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