EDINBURGH OFFICE MARKET Q3 2019 - Knight Frank...in England with registered number OC305934. Our...
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BIRMINGHAM Q4 2018 Q1 2019 90,661 126,769 218,530 110,225 78,987 Q2 2019 Q3 2019 Q3 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 £57m £66m £19m £291m £118m Q3 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019 245,638 267,733 233,806 233,305 219,048 Q3 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019 5.00% 4.75% 4.75% 4.75% 4.75% Q3 2019 TAKE-UP (sq ft) Q3 2019 78,987 Q3 2019 vs 10 year quarterly average -44% AVAILABILITY (sq ft) Q3 2019 219,048 Q3 2019 vs 10 year quarterly average -33% OCCUPIER HEADLINES INVESTMENT HEADLINES PRIME RENT (£ per sq ft) PURCHASERS (last 12 months) VENDORS (last 12 months) DEVELOPMENT PIPELINE (sq ft) Overseas UK Private INVESTMENT VOLUMES (£) Q3 2019 £118m Rolling 12 Month Average £493m PRIME YIELD (NIY) Q3 2019 4.75% Forecast 2019 4.75% EDINBURGH OFFICE MARKET Q3 2019 £34.50 Q3 2019 Year end 2019 £36.00 • Following a strong first half in 2019, take-up decreased by 28% from the previous quarter totalling 78,987 sq ft. The city centre recorded 21 deals conclude in Q3, considerably less when compared to the last two quarters, despite the same level of requirements being circulated (72). • The largest deal of Q3 for Edinburgh was the 11,713 sq ft lease to Illuminate Technologies at Apex 2/3, which was previously based in Edinburgh Park. The second largest deal was at Princes Street where Multrees Investment Serives Ltd took 10,978 sq ft. As a result TMT occupiers accounted for 48% of take-up in Q3. • Grade A supply continue to fall within the city centre, totalling 219,048 sq ft in Q3 2019, a 6% decrease compared to Q2. Construction has started on 2 Freer Street which will provide 59,000 sq ft of grade A office accommodation in the Fountainbridge area of Edinburgh. • Office investment decreased by 60% in Q3 2019 totalling £117.6m, compared with Q2 2019. However, 2019 YTD increased to £427.35m. This is 90% more when compared to the same period in 2018. • The largest deal was the sale of Exchange Plaza for £54m to a client on behalf of M&G Real Estate. The building is fully occupied with a variety of companies, including law firm Burness Paull, Cairn Energy and Artemis Fund Managers to name a few. • The strength in demand for the city’s office assets is further highlighted by the sale of Broadway Park for £28m to Ambassador Group. Currently let to Heineken International’s UK HQ and Aberdeen Standard, the building is a part of the South Gyle Business District. • Edinburgh city centre continues to attract foreign investment, accounting for 69% of investment volumes in the past 12 months. 31% 69% 13% 87% 180,554 Speculative 240,000 0 2021 2019 2020 Dates indicate the potential completion date of schemes under construction as at Q3 2019 Development schemes are inclusive of both new and comprehensive refurbishment. £ TENANT: Illuminate Technologies TERM: 10 Years (break at 5) SIZE: 11,713 sq ft RENT: £25.00 per sq ft DATE: Q3 2019 TENANT: Multrees SIZE: 10,978 sq ft DATE: Q3 2019 PURCHASER: Client of M&G Real Estate VENDOR: Murray Estates PURCHASE PRICE: £54m YIELD: 5.30% DATE: Q3 2019 APEX 2/3, HAYMARKET TERRACE 40 PRINCES STREET EXCHANGE PLAZA PURCHASER: Ambassador Group VENDOR: Oval Real Estate PURCHASE PRICE: £28m YIELD: 8.00% DATE: Q3 2019 BROADWAY PARK, SOUTH GYLE KEY TRANSACTIONS
Transcript of EDINBURGH OFFICE MARKET Q3 2019 - Knight Frank...in England with registered number OC305934. Our...
ABERDEEN LEEDSGLASGOW BRISTOL EDINBURGH CARDIFFSHEFFIELD NEWCASTLEBIRMINGHAM MANCHESTER
Q4 2018 Q1 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
£57m £6
6m
£19m
£291
m
£118
m
90,
66112
6,76
9
218,
530
110,
225
78,
987
245,
638
267,
733
233,
806
233
,305
219
,048
5.00
%
4.75
%
4.75
%
4.75
%
4.75
%
Q2 2019 Q3 2019
Q3 2019 Q3 2019
Q3 2019Q3 2018
Q4 2018 Q1 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
£57m £6
6m
£19m
£291
m
£118
m
90,
66112
6,76
9
218,
530
110,
225
78,
987
245,
638
267,
733
233,
806
233
,305
219
,048
5.00
%
4.75
%
4.75
%
4.75
%
4.75
%
Q2 2019 Q3 2019
Q3 2019 Q3 2019
Q3 2019Q3 2018
Q4 2018 Q1 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
£57m £6
6m
£19m
£291
m
£118
m
90,
66112
6,76
9
218,
530
110,
225
78,
987
245,
638
267,
733
233,
806
233
,305
219
,048
5.00
%
4.75
%
4.75
%
4.75
%
4.75
%
Q2 2019 Q3 2019
Q3 2019 Q3 2019
Q3 2019Q3 2018
Q4 2018 Q1 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2018 Q4 2018 Q1 2019 Q2 2019
£57m £6
6m
£19m
£291
m
£118
m
90,
66112
6,76
9
218,
530
110,
225
78,
987
245,
638
267,
733
233,
806
233
,305
219
,048
5.00
%
4.75
%
4.75
%
4.75
%
4.75
%
Q2 2019 Q3 2019
Q3 2019 Q3 2019
Q3 2019Q3 2018
TAKE-UP (sq ft)
Q3 2019 78,987
Q3 2019 vs 10 year quarterly average -44%
AVAILABILITY (sq ft)
Q3 2019 219,048
Q3 2019 vs 10 year quarterly average -33%
OCCUPIER HEADLINES
INVESTMENT HEADLINES
PRIME RENT (£ per sq ft)
PURCHASERS (last 12 months)
VENDORS (last 12 months)
DEVELOPMENT PIPELINE (sq ft)
OverseasUK Private
INVESTMENT VOLUMES (£)
Q3 2019 £118m
Rolling 12 Month Average £493m
PRIME YIELD (NIY)
Q3 2019 4.75%
Forecast 2019 4.75%
EDINBURGH OFFICE MARKET Q3 2019
£34.50
Q3 2019 Year end 2019
£36.00• Following a strong first half in 2019, take-up
decreased by 28% from the previous quarter totalling 78,987 sq ft. The city centre recorded 21 deals conclude in Q3, considerably less when compared to the last two quarters, despite the same level of requirements being circulated (72).
• The largest deal of Q3 for Edinburgh was the 11,713 sq ft lease to Illuminate Technologies at Apex 2/3, which was previously based in Edinburgh Park. The second largest deal was at Princes Street where Multrees Investment Serives Ltd took 10,978 sq ft. As a result TMT occupiers accounted for 48% of take-up in Q3.
• Grade A supply continue to fall within the city centre, totalling 219,048 sq ft in Q3 2019, a 6% decrease compared to Q2. Construction has started on 2 Freer Street which will provide 59,000 sq ft of grade A office accommodation in the Fountainbridge area of Edinburgh.
• Office investment decreased by 60% in Q3 2019 totalling £117.6m, compared with Q2 2019. However, 2019 YTD increased to £427.35m. This is 90% more when compared to the same period in 2018.
• The largest deal was the sale of Exchange Plaza for £54m to a client on behalf of M&G Real Estate. The building is fully occupied with a variety of companies, including law firm Burness Paull, Cairn Energy and Artemis Fund Managers to name a few.
• The strength in demand for the city’s office assets is further highlighted by the sale of Broadway Park for £28m to Ambassador Group. Currently let to Heineken International’s UK HQ and Aberdeen Standard, the building is a part of the South Gyle Business District.
• Edinburgh city centre continues to attract foreign investment, accounting for 69% of investment volumes in the past 12 months.
31%
69%
13%
87%
31%
69%
13%
87%
180,554
Speculative
240,000
020212019 2020
Dates indicate the potential completion date of schemes under construction as at Q3 2019Development schemes are inclusive of both new and comprehensive refurbishment.
£
TENANT: Illuminate Technologies TERM: 10 Years (break at 5)SIZE: 11,713 sq ftRENT: £25.00 per sq ft DATE: Q3 2019
TENANT: Multrees SIZE: 10,978 sq ft DATE: Q3 2019
PURCHASER: Client of M&G Real EstateVENDOR: Murray Estates PURCHASE PRICE: £54m YIELD: 5.30%DATE: Q3 2019
APEX 2/3, HAYMARKET TERRACE 40 PRINCES STREET EXCHANGE PLAZA
PURCHASER: Ambassador Group VENDOR: Oval Real EstatePURCHASE PRICE: £28m YIELD: 8.00% DATE: Q3 2019
BROADWAY PARK, SOUTH GYLE
KEY TRANSACTIONS
Important Notice
© Knight Frank LLP 2019 – This report is published for general information only and not
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the information, analysis, views and projections presented in this report, no responsibility
or liability whatsoever can be accepted by Knight Frank LLP for any loss or damage
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