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ESSEX I EAST LONDON I NORTH LONDON & HERTFORDSHIRE I SOUTH EAST LONDON & KENT

WELL PLACED PROPERTY ADVISORS

INTELLIGENT INSIGHT

HERTFORDSHIRE ESSEX

KENT

NORTH LONDON

SOUTH EAST LONDON

EAST LONDON

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 offices in Essex (Basildon), East London (Stratford), North London and Hertfordshire (Enfield & Harlow) and South East London and Kent (Bexley).

The statistics in this report relate to Glenny’s analysis of the property market as at 29th Sept 2019, based on property data obtained through our respective offices servicing the area delineated on the above map.

MARKET COMMENTARY

Brexit fears continue but there has been a strong bounce back in activity in 2019, with 4.8m sq ft of logistics and industrial space taken in the first three quarters of the year, already ahead of the previous year’s total. Activity to Q4 is expected to reach 6.8m sq ft, broadly in line with average take up over the past 10 years.

A number of new schemes have come to the market over the past 12 months and this has been a great stimulus to activity, with almost 50% of the year to date figure being focused on grade A space.

The depth of occupier demand has intensified, with a record number of requirements registered over the past six months, totalling 14.7m sq ft of space.

Although ready to occupy grade A supply has increased, this still only amounts to 1.7m sq ft and the only ‘Big Box’ units available are second hand stock.

The East London & Docklands office markets continue to dominate activity in the Eastern M25 region, with all other of the sub markets seeing activity running significantly below trend. The Docklands market has had its best year since 2016, with just under 1m sq ft of take up in the first nine months of this year.

Stratford continues to attract new office occupiers with the latest news that HMRC have taken the remaining space at L&G’s 14 Westfield Avenue to accommodate a further 600 workers.

John Bell Head 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 figure 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 office building, circa 5,000-10,000 sq ft.

Secondary Rent – The rent typically achievable for good quality second hand office space of 5,000-10,000 sq ft and industrial space of 20,000-25,000 sq ft.

Prime Capital Values – The best freehold capital value payable by an owner occupier on an industrial building of circa 10,000 sq ft and an office building of circa 5,000 sq ft.

4-5 ESSEX

6-7 EAST LONDON

8-9 NORTH LONDON & HERTS

10-11 SOUTH EAST LONDON & KENT

2WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2019

INDUSTRIAL PRIME INVESTMENT YIELDS

Average prime industrial yields have remained stable at 4.19% over the past 12 months despite increased uncertainty surrounding the eventual outcome of leaving the EU. Gilt yields, on the other hand, slipped back to 0.48%, close to a record low. The only sector to see a continued compression in yield is multi let industrial estates, where active managements presents the opportunity to enhance returns.

INDUSTRIAL SECTOR AT A GLANCE… OFFICE SECTOR AT A GLANCE…

OFFICE INVESTMENT MARKET TRANSACTIONS

Office investment has recorded its strongest year in the Glenny region since 2014, with £1.5bn of property changing ownership in the first three quarters of 2019. Activity was dominated by several larger transactions in the Docklands market, with Citibank buying back its 1.2m sq ft tower in 25 Canada Square E14 for £1.1bn. Citibank have a lease on the building until 2037 and plan to consolidate their workforce from the adjoining building 33 Canada Square. The price paid for the building represented a net initial yield of 4.23%.

OFFICE PRIME INVESTMENT YIELDS

Average prime office yields have also stabilised at 5.69%, with Docklands and East London the lowest across the region at 4.50% and 5.00% respectively. Outside of these two markets the other Glenny regions offer greater value, with prime yields in Essex and North London & Herts standing at 5.75% and South East London & Kent standing at 6.25%. Rental growth has stalled over the past 12 months, with some markets seeing values slip back.

OFFICE MARKET TAKE UP

Office take up across the Glenny region has remained at trend levels over the past few years but this has primarily been due to the strength of the East London and Docklands market, which have dominated activity in the region. The first three quarters of 2019 has seen a continuation of this trend, with these two markets accounting for almost 60% of the region’s office take up. The Docklands market has been particularly strong in the year to date, with just under 1m sq ft of activity recorded, the largest letting being to the European Bank of Development and Reconstruction who signed for a pre let at 1-5 Bank Street, E14.

OFFICE MARKET RENTS

Prime office rents have remained stable across most of the sub markets in the Glenny region over the past 12 months, the only exceptions to this have been in Docklands, where values edged up by 2.1%, and the South East London and Kent region where values have slipped by 20%. This should not detract from the strong growth that most markets have recorded in the longer term, with rents increasing by 5.9% per annum on average across the region as a whole, with East London (8.1% p.a.) and North London & Herts (8.8% p.a.) showing the strongest growth.

INDUSTRIAL INVESTMENT MARKET TRANSACTIONS

Investment market activity has remained relatively strong over the first three quarters of 2019 although transaction levels are expected to be down on the record levels recorded in the previous year. The largest transaction to date in 2019 is Royal London Asset Management’s purchase of Tower Thurrock from Blackrock UK Property Fund for £56m. Tower Thurrock is a multi-let logistics park, with three units totalling 273,400 sq ft built in 2014. Occupiers are Amazon, The Co-op and Elliot Baxter & Co with an average unexpired lease term of 7.7 years. The price reflects a net initial yield of 3.90%.

INDUSTRIAL MARKET TAKE UP

Following a disappointing year in 2018 when activity was impacted by shortages of supply, take up returned to trend levels across the Glenny region, with transactions totalling 4.8m sq ft in the first three quarters of the year. The pattern of activity across the sub regions is varied, with South East London & Kent registering a strong start to the year that pushed activity levels above trend, whilst both East London and Essex have shown a solid performance. North London & Herts, on the other hand has endured a difficult period, with activity below trend and a constrained supply of grade A space.

INDUSTRIAL MARKET RENTS

Prime industrial rents have stabilised over the past six months across all of the Glenny sub markets but this follows a sustained period of rental growth. Over the past five years prime rents have grown by 8.4% per annum on average, with North London & Herts (12.3% p.a.) and South East London & Kent (10.5% p.a.) seeing annualised growth in double digits. Secondary rents have continued to edge upwards as supply remains tight and occupiers vie for better quality buildings.

000

SQ

FT

0

100

200

300

400

500

Jan-Jun15

Jul-Dec15

Jan-Jun16

Jul-Dec16

Jan-Jun17

Jul-Dec17

Jan-Jun18

Jul-Dec18

Jan-Jun19

Jul-Sep19

£M’S

000

SQ

FT

0

1,000

2,000

3,000

4,000

5,000

6,000

Jan-Jun15

Jul-Dec15

Jan-Jun16

Jul-Dec16

Jan-Jun17

Jul-Dec17

Jan-Jun18

Jul-Dec18

Jan-Jun19

10 yr average

Jul-Sep19

£PSF

0.0 2.5 5.0 7.5 10.0 12.5 15.0 17.5 20.0

S E LONDON & KENT

ESSEX

£9.95

£16.50

£18.50E LONDON

N LONDON & HERTS

£17.00

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2018 Q3 20192014 2015 2016 2017

0

500

1,000

1,500

2,000

2,500

3,000

3,500

10 yr average

Jan-Jun15

Jul-Dec15

Jan-Jun16

Jul-Dec16

Jan-Jun17

Jul-Dec17

Jan-Jun18

Jul-Dec18

Jan-Jun19

Jul-Sep19

£PSF

0 10 20 30 40 50 60

S E LONDON & KENT

ESSEX

£30.00

£28.00

£48.50

£48.00

E LONDON DOCKLANDS

E LONDON (OTHER)

N LONDON & HERTS

£27.50

£M’S

0

250

500

750

1,000

1,250

1,500

1,750

Jan-Jun15

Jul-Dec15

Jan-Jun16

Jul-Dec16

Jan-Jun17

Jul-Dec17

Jan-Jun18

Jul-Dec18

Jan-Jun19

Jul-Sep19

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

2018 Q3 20192014 2015 2016 2017

DOCKLANDS PRIME OFFICE YIELD

AVERAGE PRIME OFFICE YIELD

10YR GILT YIELD AVERAGE PRIME INDUSTRIAL YIELD 10YR GILT YIELD

WELL PLACED PROPERTY ADVISORS GLENNY DATABOOK Q3 2019 3

DEMANDSUPPLYMARKET COMMENT RENTS & CAPITAL VALUES

Strong levels of activity in Q3 2019 has seen take up for the year to date move to 1.2m sq ft, only marginally below the figure recorded for the whole of 2018. The largest letting in the third quarter was the 304,355 sq ft pre let to Ocado at SEGRO Logistic Park, Purfleet.

Two further large transactions in Q3 2019 pushed activity for the quarter to 590,000 sq ft. London City Bond took the last grade A building on the market in Essex, the 162,000 sq ft Thurrock 162, whilst X-Pand Logistics have leased Clearbell Capital’s 56,850 sq ft Festival 57 in Basildon.

Supply edged higher in the six months to the end of September 2019, moving up to 2.1m sq ft, due in part to the completion of two new schemes; 223,000 sq ft at Boxset Basildon and 59,900 sq ft at Trade City Chelmsford. Second hand supply has risen to its highest level in three years, standing at 1.8m sq ft.

Demand for industrial space in Essex over the past six months has been typified by a surge in requirements for larger units. There are currently 50 separate requirements for buildings above 50,000 sq ft, totalling some 5.2m sq ft, whilst the demand for units below 25,000 sq ft has eased.

INDUSTRIAL MARKET AVAILABILITY(as at Sept 2019)

INDUSTRIAL MARKET REQUIREMENTS(as at Sept 2019)

NO OF REQS (RHS)000 SQ FT RENTAL VALUES CAPITAL VALUES (RHS)

£PSFRENTS

CAPITAL VALUES

PRIME SECONDARY PRIME

BASILDON £9.75 £8.75 £175

BRAINTREE £9.00 £8.00 £160

CHELMSFORD £9.75 £9.00 £180

THURROCK £9.95 £9.25 £190

INDUSTRIAL

TOTAL AVAILABILITY 2.1M SQ FT PERCENTAGE OF SQ FT DEMANDED

9%0–5,000

10%5,001–10,000

19%10,001–25,000

18%25,001–50,000

44%> 50,000

38%SUPPLY

3%0–5,000

6%5,001–10,000

15%10,001–25,000

19%25,001–50,000

57%> 50,000

1%DEMAND

INDUSTRIAL MARKET DEMAND RENTS & CAPITAL VALUES INDUSTRIALINDUSTRIAL MARKET TAKE UP INDUSTRIAL MARKET AVAILABILITY

0

250

500

750

1,000

1,250

1,500

-6%TREND

10 yr average

15Jan-Jun

15Jul-Dec

16Jan-Jun

16Jul-Dec

17Jan-Jun

17Jul-Dec

18Jan-Jun

18Jul-Dec

19 19

000 SQ FT

Jan-Jun Jul-Sep

000 SQ FT

0

500

1,000

1,500

2,000

2,500

3,000

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

000 SQ FT No.

0

2,000

4,000

6,000

8,000

10,000

12,000

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

50

100

150

200

250

300

350

400

450

0

2

4

6

8

10

12

£ SQ FT £ SQ FT

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

20

40

60

80

100

120

140

160

180

200

0.0%RENT

0.0%CAPVAL

ESSEX

2ND HAND GRADE A


DEMANDSUPPLY RENTS & CAPITAL VALUES

OFFICESESSEX

MARKET COMMENT

Activity in the Essex office market has remained below trend since 2016, with take up in the first nine months of the current year standing at 108,600 sq ft, compared to trend levels of activity of 320,000 sq ft p.a. Take up has been focused on lettings of 10,000 sq ft and below, which accounts for 76% of activity so far this year.

Supply remains constrained, with only 536,500 sq ft on the market at the end of Q3 2019, with more than 85% of available space in second hand stock. Grade A supply has fallen to its lowest level in three years, with only 78,000 sq ft available and almost 60% of this space in Buckenham House, Coval Wells, Chelmsford. The availability rate in Essex remains the lowest amongst the Glenny region, standing at 3.7%.

Demand has eased over the past six months, falling back to 678,400 sq ft. Whilst demand is down across most size bands in our analysis, there remains a strong focus towards buildings of 10,001-25,000 sq ft, which accounts for 41% of overall requirements in the market.

Prime rents have remained stable across all locations, with the primary office market locations of Brentwood and Chelmsford continuing to attract the highest rent of £30.00 per sq ft. Secondary rents have also stabilised, although Basildon saw a slight upward movement, with rents edging up to £18.00 per sq ft.

OFFICE MARKET REQUIREMENTS(as at Sept 2019)

OFFICE MARKET AVAILABILITY(as at Sept 2019)

£PSFRENTS

CAPITAL VALUES


BASILDON £21.00 £18.00 £280

BRAINTREE £18.00 £14.00 £265

BRENTWOOD £30.00 £23.00 £400

CHELMSFORD £30.00 £23.00 £400


OFFICE MARKET AVAILABILITYOFFICE MARKET TAKE UP OFFICE MARKET DEMAND RENTS & CAPITAL VALUES OFFICE

000 SQ FT

10 yr average

0

50

100

150

200

250

300

-54%TREND

Jan-Jun19

Jan-Jun15

Jul-Dec 15

Jan-Jun16

Jul-Dec 16

Jan-Jun17

Jul-Dec 17

Jan-Jun18

Jul-Dec18

Jul-Sep19

000 SQ FT

0

250

500

750

1,000

1,250

Jun18

Dec18

Jun19

Sep19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

000 SQ FT No.

0

200

400

600

800

1,000

1,200

Jun18

Dec18

Jun19

Sep19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

0

10

20

30

40

50

60

70

80

90

100

£ SQ FT £ SQ FT

0

5

10

15

20

25

30

35

Jun18

Dec18

Jun19

Sep19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

0.0%RENT

0.0%CAPVAL

00

50

100

150

200

250

300

350

400

450

28%0–5,000

19%5,001–10,00035%

10,001–25,000

18%25,001–50,000

-1%SUPPLY

14%0–5,000

14%5,001–10,000

41%10,001–25,000

17%> 50,000

14%25,001–50,000 -33%

DEMAND

2ND HAND GRADE A 000 SQ FT NO OF REQS (RHS) RENTAL VALUES CAPITAL VALUES (RHS)


DEMANDSUPPLY RENTS & CAPITAL VALUESMARKET COMMENT

Take up in the East London industrial market is expected to match trend levels in 2019 for the first time in five years. Activity in the first three quarters of the year has already surpassed total take up in 2018, with just under 800,000 sq ft of space acquired.

Activity has been boosted by an increase in lettings of grade A space, with the recently re-launched Logic 233 in Dagenham letting to Eddie Stobart, whilst Unit 1 at SEGRO Park Rainham was taken by Babcock.

Supply has fallen back to its lowest level in three years, standing at just under 920,000 sq ft. Following a number of new schemes completing over the past few years, grade A supply has been boosted but with occupiers targeting better quality stock, new stock has also fallen back to 355,500 sq ft, down from 470,900 sq ft at the end of Q1. The availability rate in East London has dropped below 2% once again, standing at 1.9%.

Demand bounced back strongly over the six months to the end of Q3 2019, reaching an all time peak for the East London market of 9.8m sq ft. The most significant increase in demand has been in the mid range size band, with requirements for buildings of 25,001-50,000 sq ft increasing by 1m sq ft since Q1 2019.

INDUSTRIAL MARKET REQUIREMENTS (as at Sept 2019)


£PSFRENTS

CAPITAL VALUES


BARKING / DAGENHAM £13.00 £10.00 £225

BECKTON /ROYALS £15.00 £13.50 £245

ROMFORD £11.00 £9.50 £200

CANNING TOWN £18.50 £16.00 £300


16%0–5,00020%

> 50,000

22%5,001–10,000

26%10,001–25,000

16%25,001–50,000 -17%

SUPPLY

4%0–5,000

6%5,001–10,000

15%10,001–25,000

25%25,001–50,000

50%> 50,000

18%DEMAND

INDUSTRIAL MARKET AVAILABILITYINDUSTRIAL MARKET TAKE UP INDUSTRIAL MARKET DEMAND RENTS & CAPITAL VALUES INDUSTRIAL

000 SQ FT

0

100

200

300

400

500

600

700

10 yr average

-3%TREND

Jan-Jul19

Jul-Sep19

Jan-Jun15

Jul-Dec 15

Jan-Jun16

Jul-Dec 16

Jan-Jun17

Jul-Dec 17

Jan-Jun18

Jul-Dec18

11000

000 SQ FT

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

11000

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11000

0

50

100

150

200

250

300

350

400

450

000 SQ FT No.

11,000 450

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

£ SQ FT £ SQ FT

0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

RENT CAPVAL

0

50

100

150

200

250

300

350

0.0% 0.0%

INDUSTRIALEAST LONDON




EAST LONDON

MARKET COMMENT

The East London office market has seen activity remain close to trend levels in the first three quarters of 2019, with 256,400 sq ft of take up recorded. The most significant letting was the news that HMRC will be increasing the number of staff at their new hub at Westfield Stratford City, taking the remaining 60,000 sq ft at 14 Westfield Avenue. The building is due to complete in late 2020.

Take up in the Docklands office market has been particularly strong over the first three quarters of 2019, with a number of larger lettings pushing total activity to 971,700 sq ft. The largest transaction was the 365,000 sq ft pre let to the European Bank of Reconstruction and Development, who are relocating their head office from the City to a new building at 1-5 Bank Street, E14.

Supply edged up across the East London and Docklands region as a whole, rising to 3.4m sq ft, primarily on the back of the completion of the first phase at ABP’s Royal Albert Dock scheme. A total of 460,000 sq ft was launched in April 2019, with the largest building Altitude offering 119,863 sq ft of Grade A HQ office space.

Demand remains strong in the East London office market, with 1.2m sq ft of requirements registered in the six months to the end of September 2019. The most significant upturn in demand has been for buildings of 10,001-50,000 sq ft, where requirements were up by 60% to 652,000 sq ft.

DOCKLANDS OTHER



£PSFRENTS

CAPITAL VALUES


BARKING / DAGENHAM £20.00 £15.00 £250

ROYALS £35.00 £21.00 £650

ROMFORD £21.00 £17.50 £310

STRATFORD £48.00 £25.00 £750


5%0–5,000 4%

5,001–10,000

7%10,001–25,000

8%25,001–50,000

76%> 50,000

17%SUPPLY

9%0–5,000

10%5,001–10,000

30%10,001–25,00023%

25,001–50,000

28%> 50,000

13%DEMAND

OFFICE MARKET TAKE UP OFFICE MARKET AVAILABILITY OFFICE MARKET DEMAND RENTS & CAPITAL VALUES OFFICE

000 SQ FT

0

100

200

300

400

500

600

700

800

900

22%TREND

Jan-Jun19

Jan-Jun15

Jul-Dec 15

Jan-Jun16

Jul-Dec 16

Jan-Jun17

Jul-Dec 17

Jan-Jun18

Jul-Dec18

Jul-Sep19

Other 10 yr average

Docklands 10 yr average

000 SQ FT000 SQ FT

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

000 SQ FT No.

0

250

500

750

1,000

1,250

1,500

0

10

20

30

40

50

60

70

80

90

100

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

10

20

30

40

50

£ SQ FT £ SQ FT

0

100

200

300

400

500

600

700

800

0.0%RENT

0.0%CAPVAL

OFFICES

2ND HAND GRADE A DOCKLANDSOTHER CAPITAL VALUES (RHS)000 SQ FT NO OF REQS (RHS)



Activity in the first three quarters of 2019 has remained below the trend rate, with 595,500 sq ft of lettings completing. A number of larger transactions have completed over Q2 and Q3, with the largest being the pre let of 101,827 sq ft by Waitrose at Crown Road Enfield for one of its first dedicated customer fulfilment centres. The site is due to open in 2020.

There has been a significant upturn in supply over the past six months, with total availability rising by 0.5m sq ft to 1.8m sq ft at the end of September 2019. The increase in supply has been attributable to a rise in second hand space on the market, which now stands at 1.6m sq ft.

Grade A supply remains constrained, with only 221,700 sq ft currently available. The largest new unit is Urban 85 at Enfield Distribution Park, which offers 84,805 sq ft. Despite the increase in overall supply, the availability rate in the North London & Herts market remains one of the lowest amongst the Glenny region, standing at 2.5%.

Demand rebounded to 9.5m sq ft in the six months to the end of September 2019, with a strong increase in requirements for buildings of 10,001-50,000 sq ft. Requirements in this sector of the market rose by 80% to 4.7m sq ft, a record for the North London & Herts market.



£PSFRENTS

CAPITAL VALUES


ENFIELD £14.50 £13.00 £250

HARLOW £9.50 £8.25 £175

HODDESDON £9.25 £8.00 £185

TOTTENHAM / EDMONTON £17.00 £14.25 £300

RENTS & CAPITAL VALUES INDUSTRIAL


6%0–5,000

6%5,001–10,000

21%10,001–25,000

23%25,001–50,000

44%> 50,000

37%SUPPLY

3%0–5,000

6%5,001–10,000

19%10,001–25,000

30%25,001–50,000

42%> 50,000

20%DEMAND

INDUSTRIAL MARKET AVAILABILITYINDUSTRIAL MARKET TAKE UP INDUSTRIAL MARKET DEMAND

0

250

500

750

1,000

1,250

-50%TREND

000 SQ FT

10 yr average

Jan-Jun19

Jan-Jun15

Jul-Dec 15

Jan-Jun16

Jul-Dec 16

Jan-Jun17

Jul-Dec 17

Jan-Jun18

Jul-Dec18

Jul-Sep19

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

000 SQ FT

0

500

1,000

1,500

2,000

2,500

3,000

3,500

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

2,000

4,000

6,000

8,000

10,000

12,000

000 SQ FT No.

0

50

100

150

200

250

300

350

400

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

£ SQ FT £ SQ FT

0

50

100

150

200

250

300

350

0.0%RENT

7.1%CAPVAL

INDUSTRIALNORTH LONDON & HERTS





OFFICE MARKET REQUIREMENTS (as at Sept 2019)

NORTH LONDON & HERTS

MARKET COMMENT

Take up in the North London & Herts office market has been boosted by the decision by Metaswitch Ltd to consolidate their occupancy into a new building to be constructed on the former car park site in the centre of Enfield. The 55,000 sq ft pre let helped boost take up to 218,000 sq ft in the first nine months of the year.

Supply move back below 1m sq ft in the six months to the end of Q3 2019, falling to 886,200 sq ft. Grade A supply continues to be dominated by North London Business Park, N11, where 243,000 sq ft is available in two buildings. The park is currently subject to a planning application for a residential led mixed use scheme.

The other major grade A space is at Kao Park Harlow, where 42,217 sq ft is available in Kao Two. The overall availability rate in the North London & Herts office market is 4.9%, below the average for the Glenny region, which stands at 6.5%.

Demand for offices in North London & Herts moved back to levels last seen in 2007, with 1.2m sq ft of requirements registered in the six months to the end of Q3 2019. The most significant increase in demand was for buildings of 10,001-50,000 sq ft, where requirements increased by 71% to 670,000 sq ft.

£PSFRENTS

CAPITAL VALUES


ENFIELD £27.50 £21.50 £425

HARLOW £18.50 £13.50 £275

HODDESDON £17.50 £13.50 £250

WELWYN GARDEN CITY £21.00 £17.50 £325


21%0–5,000

15%5,001–10,000

18%10,001–25,000

19%25,001–50,000

27%> 50,000

-15%SUPPLY

23%25,001–50,000

26%> 50,000

9%0–5,000

11%5,001–10,000

31%10,001–25,000

24%DEMAND


000 SQ FT

10 yr average

0

50

100

150

200

250

300

350

-32%TREND

Jan-Jun19

Jan-Jun15

Jul-Dec 15

Jan-Jun16

Jul-Dec 16

Jan-Jun17

Jul-Dec 17

Jan-Jun18

Jul-Dec18

Jul-Sep19

000 SQ FT

0

250

500

750

1,000

1,250

1,500

1,750

2,000

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

000 SQ FT No.

0

250

500

750

1,000

1,250

0

20

40

60

80

100

120

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

5

10

15

20

25

30

0.0%RENT

0.0%CAPVAL

0

100

200

300

400

500

£ SQ FT £ SQ FT

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

OFFICES




SOUTH EAST LONDON & KENT

MARKET COMMENT

The strong activity recorded in Q1 2019 has pushed take up above trend levels in the year to date, with 2.2m sq ft of lettings recorded in the first three quarters of the year.

The absence of ready to occupy buildings above 100,000 sq ft in the South East London & Kent market meant that activity was slower in Q2 & Q3 2019, with the two largest transactions being the sale of the 86,660 sq ft Unit 1 Belvedere Wharf for owner occupation, whilst CEVA Logistics took 80,300 sq ft spec built unit at Capacity Dartford.

Supply moved up to 3.3m sq ft in the six months to the end of Q3 2019, due to a number of new schemes completing. Grade A supply now stands at 845,765 sq ft, with a good spread of units across all size bands. The availability rate now stands at 3.6%, slightly above the average for the Glenny region of 2.8%.

Demand eased back in the latter stages of 2019, following the strong levels of activity recorded in the South East London & Kent market over the first three quarters of the year. Total demand fell back to 6.2m sq ft, although an increase in the number of requirements illustrates that the depth of demand for medium and smaller sized units has strengthened.



£PSFRENTS

CAPITAL VALUES


ASHFORD £10.00 £8.50 £160

CHARLTON /WOOLWICH £16.50 £15.00 £275

BELVEDERE / DARTFORD £13.00 £11.00 £225

MAIDSTONE £9.50 £8.50 £180


18%0–5,000

22%5,001–10,000

28%10,001–25,000

19%25,001–50,000

13%> 50,000

9%SUPPLY

4%0–5,000 4%

5,001–10,000

15%10,001–25,000

20%25,001–50,000

57%> 50,000 -12%

DEMAND

INDUSTRIAL MARKET AVAILABILITYINDUSTRIAL MARKET TAKE UP INDUSTRIAL MARKET DEMAND RENTS & CAPITAL VALUES INDUSTRIAL

000 SQ FT

0

250

500

750

1,000

1,250

1,500

1,750

2,000

10 yr average

23%TREND

Jan-Jun19

Jan-Jun15

Jul-Dec 15

Jan-Jun16

Jul-Dec 16

Jan-Jun17

Jul-Dec 17

Jan-Jun18

Jul-Dec18

Jul-Sep19

000 SQ FT

0

1,000

2,000

3,000

4,000

5,000

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

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

0

50

100

150

200

250

300

350

400

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

2.5

5.0

7.5

10.0

12.5

15.0

17.5

20.0

£ SQ FT £ SQ FT

0.0%RENT

5.8%CAPVAL

0

50

100

150

200

250

300

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

INDUSTRIAL




Take up in the South East London & Kent office market continues to run at below trend levels, with a total of 283,000 sq ft of space acquired in the first three quarters of the year, significantly below the 10 year average figure of 610,000 sq ft p.a.

Activity remains focused on the smaller suite market, with almost 78% of take up focused on lettings below 10,000 sq ft. The most significant transaction in the year to date has been the 14,345 sq ft letting at Crossways Business Park, Dartford.

Supply has remained relatively stable over the past three years, with total availability standing at 1.1m sq ft. Second hand space accounts for 92% of stock on the market. The largest building on the market is the 85,000 sq ft former Fidelity International building, Oakhill House, Tonbridge.

Demand moved up to its highest level in three years, with total requirements of 461,800 sq ft. The most significant increase in requirements was for buildings of 10,001-25,000 sq ft, where demand has more than doubled over the past six months to 240,700 sq ft.



£PSFRENTS

CAPITAL VALUES


BROMLEY £28.00 £22.50 £375

DARTFORD £24.00 £16.50 £310

GREENWICH £28.00 £22.00 £400

MAIDSTONE £22.50 £15.00 £250


8%> 5,000

22%5,001–10,000

18%10,001–25,000

17%25,001–50,000

-1%SUPPLY

35%0–5,000

18%0–5,000

23%5,001–10,000

52%10,001–25,000

7%25,001–50,000

62%DEMAND


000 SQ FT

0

100

200

300

400

500

600

700

800

-38%TREND

10 yr average

Jan-Jun19

Jan-Jun15

Jul-Dec 15

Jan-Jun16

Jul-Dec 16

Jan-Jun17

Jul-Dec 17

Jan-Jun18

Jul-Dec18

Jul-Sep19

000 SQ FT

0

250

500

750

1,000

1,250

1,500

1,750

2,000

2,250

2,500

2,750

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

0

100

200

300

400

500

600

700

000 SQ FT No.

0

10

20

30

40

50

60

70

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

£ SQ FT £ SQ FT

0

5

10

15

20

25

30

35

40

-6.7%RENT CAPVAL

0.0%

0

50

100

150

200

250

300

350

400

450

Jun18

Dec18

Jun19

Jun15

Dec15

Jun16

Dec16

Jun17

Dec17

Sep19

OFFICESSOUTH EAST LONDON & KENT



RESEARCH

ARCHITECTURE

ASSET & PROPERTY MANAGEMENT

BUILDING CONSULTANCY

BUSINESS SPACE AGENCY

INVESTMENT

RESIDENTIAL DEVELOPMENT

REGENERATION & INFRASTRUCTURE

RESIDENTIAL MANAGING AGENTS

DEVELOPMENT

STRATEGIC PLANNING

VALUATION SERVICES

ESSEX

Jim O’Connell

01268 540 771

[email protected]

3 Argent Court, Sylvan Way, Basildon, Essex SS15 6TH

EAST LONDON

Peter Higgins

020 3141 3500

[email protected]

Fifth Floor, Unex Tower, Station Street, Stratford, London E15 1DA

NORTH LONDON & HERTS Ivan Scott

020 8367 2334

[email protected]

1 Crossfield Chambers, Gladbeck Way, Enfield, Middlesex EN2 7HR

SOUTH EAST LONDON & KENT

Richard Seton-Clements

020 8304 4911

[email protected]

21 Bourne Road, Bexley, Kent DA5 1LW

DEVELOPMENT & INVESTMENT

John Bell Philip Colman

020 3141 3540 020 3141 3520

[email protected] [email protected]


BUSINESS SPACE LEASE ADVISORY

William Martin

020 3141 3612

[email protected]


RESEARCH

For more information email

[email protected]

LEASE ADVISORY

PROJECT MANAGEMENT

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, offices, 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. Sept 2019.

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