Presentation from JLL's 2018 London Office Market Seminar.

1. Driving performance in uncertain times
London Office Markets Seminar

2. Any sign of a building boom?
Central London historic development completions
35
8.6 9.2
6.8
1990-92 2001-03 2007-09 2018-20 (under construction)
Speculative Pre-let

3. Leasing market
indicators
Strong take-up
Past 12 months: 11.3 million sq ft
10 year average: 9.9 million sq ft
Absorption positive in 2017
Past 12 months: 1.1 million sq ft
10 year average: 2.4 million sq ft
Vacancy remains low
Currently: 5.0%
10 year average: 5.5%

4. Occupier Drivers
Health & wellbeing Amenity
Lease
flexibility
Co-working
Technology
Social impact

5. 2017 volumes are predicted to hit £18 billion…
Central London office investment turnover, 2000 – Q3 2017
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
2
4
6
8
10
12
14
16
18
20
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Overseas share£ billion
UK Overseas Overseas share (RHS)

6. Prime office yields – global cities
2000 – 2017
Due to differences in reporting metrics across the globe, data is not strictly comparable.
Source: JLL, October 2017
Yield%
2%
3%
4%
5%
6%
7%
8%
FRANKFURT
WEST END
CITY
PARIS
NEW YORK
TOKYO

7. Total Central London
investment by origin of capital
37.2%
17.3%
12.3%
ME6.4%
5%
4.9%
16.9%

8. In conclusion…
Leasing market
Market fundamentals remain sound
Extreme downside risk to BREXIT related jobs overstated
New sources of demand in London
Some forecasts too pessimistic
Submarket and asset performance will continue to vary
significantly
Capital markets
London yields highest of all global gateway cities
HK Chinese money will remain short/mid term
Prime yield will remain stable
Secondary is overvalued
Overall
Market looks stable, widespread growth unlikely
Location and asset choice selection is key to performance