Chiswick Curve

CHISWICK CURVE

OFFICE REPORT

DECEMBER 2015 Executive Summary

Brief:

• The Site

• Overview of conventional Chiswick and Brentford office markets - Appendix I Chiswick and Brentford Supply, Demand and Take-Up Schedules

• Overview of serviced/collaborative working – Appendix II Serviced Office Update

• The Occupier’s Perspective – Appendix III London Hot Spots

• Chiswick Roundabout – Key Features of the Office Scheme

• Potential Success Assuming Serviced Offices and Collaborative Workspace – Appendix IV LB Hounslow Location Analysis

• Conclusion

• Appendix V JLL Western Corridor Report

Chiswick Roundabout

The Site

The Site constitutes land at Chiswick Roundabout, Junction of Gunnersbury Avenue and Great West Road, W4.

Chiswick Roundabout is a strategic development site benefiting from excellent and immediate accessibility to the national motorway network via the A4, M4 and M25, giving access to Heathrow and Central London. It has an implemented planning consent for 19,750sqm of office floorspace within a 60m building, which has not been built out due to uncertainty surrounding such a development commenced at the height of the economic downturn which, combined with the inflexibility of the original proposed office scheme and the undeveloped nature of the micro-environment until recently, has meant that it was not commercially appealing to the market.

Key characteristics of the scheme have now been adapted and the proposed redevelopment of the Site will provide a mixed use building split between one part ground plus 31 storeys and one part ground plus 24 storeys, comprising 320 residential units, (Use Class C3), office (Use Class B1) and retail/restaurant uses (Use Class A1/A3), basement car and bicycle parking, resident amenities, hard and soft landscaping and advertisement consent with all necessary ancillary and enabling works.

The most recent revisions to the plans should broaden the building’s appeal to office occupiers. Given the size of the floor plates and the location however, we believe that the demand will principally be for more flexible work solutions (ie co-working or serviced office model) but equally could appeal to a single tenant for whom brand advertising is key at such a prominent location on the Chiswick Roundabout.

Chiswick – Occupational Overview

Location

Chiswick is located 6.5 miles due west of central London and benefits from good transport links to the core west end and city markets. Chiswick is served by an overground rail link from Key Bridge Station to London Waterloo, with a journey time of 27 minutes to London Waterloo, as well as District Line underground at Gunnersbury. The A4 dual-carriageway also provides good access to Central London in the east and Heathrow to the west.

In addition, due to its strategic location, Chiswick is recognised as one of the major London office sub- markets and is one of West London’s largest employment hubs with the likes of the nearby award winning Chiswick Business Park, whose occupiers include Discovery Channel, Tullow Oil, Starbucks, Swarovski, QVC, Paramount Pictures, CBS News and a host of other international brands, who have moved to the area due to the mix of leafy surroundings and easy access to Heathrow.

Adjacent to the site, is Power Road Estate, which includes Power Road Studios, an impressive and iconic 3-4 storey 1930’s brick built warehouse that was historically used by the Singer Sewing Machine Co. and the BBC’s Research and Development Department. The building is arranged around a central courtyard and it retains many of the original features such as exposed metal columns, high ceilings and an impressive reception area. The building has been used as a creative hub to music, TV and filming over the past decade.

The neighbouring centre of Brentford, also within LB Hounslow, is formerly associated with a strong industrial centre and nicknamed “The Golden Mile” running along the famous Great West Road. The area has, in recent years, become a strong commercial centre, home to many multi-national corporations. Due to Brentford’s increasing reputation as a business location, the area has recently been going through a significant programme of urban regeneration including a number of commercial and residential developments along Great West Road, The Grand Union Canal and River Thames. Connectivity is similar to those for Chiswick and rail links are also strong with Brentford Train Station providing direct access to London Waterloo and Boston Manor Underground Station providing fast access to Central London via the Piccadilly Line.

To further demonstrate the appeal of the area to multi-sector business, outlined in the table below is a selection from small to large business occupiers who call the area home.

TMT Occupiers Banking and Finance Oil and Gas Healthcare Service Sector

CBS News Airplus International JMJ Associates Atlantis Healthcare Bluefin Solutions Vision 247 Genworth Financial Aker Solutions Virgin Active Foxtons 24 Live Insurance Baker Hughes International SOS Mizkan Euro Discovery Networks Europe Arena Wealth Halliburton Ranbaxy Otis Ericsson Allianz Seadrill GSK PepsiCo IMG Tullow Oil Transform Clinics Pernod Ricard UK Intelsat Worley Parsons Regus MicrosStrategy School of Coaching Openbet Singapore Airlines Paramount Animation Starbucks Coffee Company Primetals Technologies Swarovski Qualcomm Verisure QVC Media & Commerce Centre Education & Media Services SBS Discovery Media University of West London The Pokemon Company International Audi TBS News Mercedes Technicolor Network Services Gulf Air BSC The Walt Disney Company United Business Centres Limited United International Pictures Novomatic Vue Entertainment BSI SKY TV Spink IDIS Europe Limited Balloon One Limited Savin Communications Limited EMC Samsung Sega Group

Traditional Office Supply

Current office supply in Chiswick totals 189,640 sqft, of which around 34% comprises Grade A stock. Grade A stock comprises new and comprehensively refurbished buildings with a minimum base specification of raised floors, suspended ceilings and LG7/LED lighting. The vacancy rate in Chiswick is low in the context of the wider Western Corridor market at only 5.4% its total office stock.

Given that Grade A supply is generally regarded as constrained, it is useful to note the emerging office offer, from recent local planning consents which may assist to restore a balance to given the erosion of office supply through permitted development conversion.

- Former Alfa Laval, Site, Great West Road, Brentford, TW8 9BU (LPA ref. P/2011/1133) Granted February 2012 – 4,677sqm office

- Land and Buildings at Commerce Road, Brentford, TW8 8LE (LPA ref. P/2010/3110) Granted March 2012 (under construction) – up to 6,780 sqm office

- BSkyB, Centaurs, Business Park, Grant Way, Isleworth, TW7 5QD (LPA ref. P/2011/3559 and /2013/2483) Granted April 2012 and December 2013– 175,000 sqm office and research

- Land to the South Side of Brentford High Street and Waterside, Brentford (LPA ref. P/2012/2735) Granted November 2014 – up to 4,000 sqm office

- Land Adjacent to Kew Bridge, Kew Bridge Road, Brentford, TW8 0ED (LPA ref. P/2011/0747) Granted October 2011 (under construction) – 3,035 sqm office / retail / restaurant

- Wheatstone House, 650 Chiswick High Road, Chiswick, W4 5SA (LPA ref. P/2013/2757) Granted at appeal March 2015 – 464 sqm flexible office and retail (A1-A4 / B1)

- 500 Chiswick High Road and 30-32 Chiswick Road, Chiswick, W4 5RG (LPA ref. P/2013/4093) Granted July 2014 –1,547 sqm office

- Kew Bridge Distribution Centre, Lionel Road South, Brentford, TW8 9QR (LPA ref. P/2011/2136) Granted February 2012 – 884 sqm office

Also attached in Appendix I is a demand and supply schedule outlining current occupier requirements for Chiswick and Brentford as well as an overview of supply across the borough focusing on Chiswick, Brentford and Hounslow.

Take Up

After a strong year in 2014 the Chiswick office market has experienced a quieter first half to the year in 2015 with take up totalling 23,358sqft in Q1, 5,533sqft in Q2 and a more robust 48,481sqft for Q3. These take up figures are significantly below levels achieved in 2014, which got off to a strong start with a number of large deals, including Pernod Ricard at Building 12 Chiswick Park and Universal Music Operations Ltd at Chiswick Place, completing in the first few months. It should be noted that Danone are currently under offer on c. 40,000 sq ft at Building 7, Chiswick Park. The 2015 year-on-year figures therefore highlight the high levels of occupier activity in 2014 as much as the subdued market in 2015 although, the factor of supply could also account for a reduction in demand as occupiers look to other centres.

See Appendix 1 for take up schedule.

Outlook

The latter half of 2015 is expected to see a strong performance in the occupier market across the Western Corridor. The uncertainty in the lead up to the General Election resulted in a slow start to the year but levels of occupier confidence continue to rise driven by robust GDP growth and rising real wages. Chiswick’s limited levels of supply are likely to underpin significant rental growth over the next five years. The recently launched B7 Chiswick Park offers high quality office space in this established location, and may well appeal to occupiers in the core Central London markets looking to relocate.

Employment growth and growing business confidence has resulted in an upswing of office take up within the wider Central London markets. Take-up reached 3.7 million sqft in Q2, for a half year total of 6.3 million sqft, never the less, office demand continues to be strong.

Available supply fell across all London office markets in Q2, down by 20% in the City and 15% in both the West End and Docklands. This is in line with expectations that the lack of speculative development completions in 2015 would see supply tighten and it is projected that there will be a shortfall in provision of office space in London until at least 2018.

Furthermore, the government announced plans in the summer to extend permitted development rights, to change from office to residential which were temporarily introduced in May 2013 for three years, beyond May 2016. The General Permitted Development Order (GPDO) allows certain specified types of development to take place without the need to go through the normal planning process.

The net effect of a continuing active level of PDR conversion and a projected short to medium term office supply shortage provide a good market for commercial space at Chiswick Roundabout.

Co-Working and its impact on the UK Serviced Office Market Co-working is a new and fashionable emerging market over the past 2 years that involves a shared working environment, often an office, and independent collaborative activity. Unlike in a typical office environment, those co-working are usually not employed by the same organization. Typically it is attractive to work-at-home professionals, independent contractors, or people who travel frequently who end up working in relative isolation. Co-working is also the social gathering of a group of people who are still working independently, but who share values, and who are interested in the synergy that can happen from working with like-minded talented people in the same space. Further to the above and with the severe growth of the TMT sector over the past few years, companies are now far more focused upon increasing the productivity of their employees by offering a more flexible work-life environment through a far more collaborative working solution. Co-working is not only about the physical space, the main providers of this space like WeWork, Second Home, Central Working and The Office Group have put a real emphasis upon creating a community and network within each building and also within their office portfolios as a whole. These networks make a co-working solution extremely attractive due to the synergies on offer with other similar companies within the space. A lot of co-working communities are formed by organising casual co-working events that take place within the space on a regular basis; this allows each business the chance to educate other businesses within their space on their business, in turn effectively growing their business network. JLL feel the new arrival of a co-working solution has revolutionised the serviced office market. The opinion of many is that the co-working solution is a different product to the older and more traditional serviced office model. There is no doubt it is but we feel both are still very closely linked and despite being behind the co-working curve we feel both co-working firms and serviced office providers will be competing closely over the coming years as both look to replicate and exploit the benefits that each model offers. The traditional model of a serviced office, squeezing as much revenue from a floor plate as possible has begun to change with the serviced office providers now offering far more circulation space, meeting rooms and break-out areas to try and enhance the working environment for their clients. Providers may have made more revenue from each floor plate previously; however, there is a strong opinion now that clients will stay longer if you offer them a more versatile working environment and so the revenue you may lose from having less office space will be made up through occupiers staying for longer. This is also linked to the growth of the TMT sector and the need for serviced office providers to move away from their corporate feel. It will take time for the larger serviced office providers to change, however, in time we feel they will offer solutions far closer to the co-working model. On the other hand, whilst we see a huge increase in enquiry for co-working space and shared space, it is also clear that the UK market and its numerous sectors have a need for the more traditional serviced office model. Industries like Insurance, Law and Finance are all open to the co-working model and it is by no means only linked to TMT but they also value their privacy and need for confidentiality in the office. Some co- working options can feel too much like a fish bowl and our opinion is that this could put off and alienate them from certain sectors in the UK market.

The co-working market has historically been based around TMT locations like Old Street, Shoreditch, Southbank and more fringe London locations but given the current lack of supply in the London market along with other sectors and industries now seeking a new way of working, we expect to see many more co-working operations opening in the more core office locations. The closest connection to the co-working model is that of Power Road. These studios are currently home to a variety of small, media and IT related businesses occupying suites of between 500 and 2,000sqft. Given the profile and these tenants, the site would be prime `move on’ option that would provide a complementary office offer to Power Road. The reality is that there is a gap in the Hounslow market for the evolved serviced model that co-working offers small and medium local business and yet no provider has fully addressed or harnessed this opportunity to date. See Appendix II

The Occupier’s Perspective

When occupiers are considering expansion, relocation or footprint optimisation, a range of key financial and non-financial location criteria need to be assessed and evaluated collectively to ensure that any investment is aligned with their business strategy. Cost and quality of talent are vital to any growing business and need to be considered with other key location factors, such as accessibility and connectivity. Although many strategic business decisions are primarily driven by financial factors, non- financial factors are sometimes equally important, particularly when assessing new locations for expansion or relocation.

As occupancy costs are rising in Central London, occupiers with large footprints are looking to relocate their back office, and in some cases middle office, staff to lower cost locations. Traditionally companies would look at moving these job roles off shore, but now there are viable options within the region in emerging lower cost business centres. With its excellent connectivity to Central London and significant cost arbitrage benefits, Chiswick has the attributes to take advantage of this growing trend.

Chiswick performs well on a number of key location factors, appealing not only to existing occupiers in the region, but growing and relocating businesses from within the UK and abroad.

Working Environment

Employee retention and attraction is increasingly important for occupiers, as the recruitment of key talent is becoming more competitive, particularly in and around London. Occupiers are now investing more in their working environments and are demanding better quality buildings that are flexible and will appeal to the younger generation.

With growing occupancy costs and competition for Grade A accommodation in Central London, occupiers are now looking at alternative non-core locations, for significant cost arbitrage.

Reshoring Trend

Recent changes in the global economic and business landscape have resulted in an apparent reversal of the offshoring location trend with a number of companies electing to move operations back to the UK. The move to re-shoring and near shoring is also impacting the services sector with a range of financial and wider professional services companies such as law firms exploring ways to expand their enterprise footprint in lower-cost UK locations. The trend is not simply preserved for multinational companies either. Many mid-market firms are in the process of scrutinising their portfolios and looking for low-cost or nearshore alternatives.

With competitive occupancy costs and excellent connectivity to London and abroad, Chiswick could also appeal to companies considering moving operations back to the UK.

Transport Infrastructure

Accessibility is a key location factor for any relocation or business expansion. Accessibility to the office and key transport nodes is not only important for employees commuting to work, but also connectivity to clients and domestic and international business hubs. Chiswick Roundabout has a world class, multimodal, integrated transport infrastructure which provides connectivity across Central London and the region, and direct access to the rest of the UK and world through Heathrow and Gatwick Airports.

Chiswick Roundabout has excellent road and rail accessibility, with direct tube and rail services to Central London. The road network is extensive, with direct access to the A4, M4, North and South Circular Roads offering links to the wider strategic networks to the rest of the UK.

Brand Recognition / Iconic Location

The Chiswick Roundabout site occupies an exclusive position and benefits from excellent prominence at the entrance to the west end of London, now known as the Capital Gateway to London. The site is strategically located 8 miles east of Heathrow airport and 7 miles west of Piccadilly Circus alongside the M4 motorway in an area where the network of major roads intersect before entering the west end. The individual design of the building and its position allows brands and occupiers the opportunity to be part of this iconic building. Due to its location there has been an opportunity to build in advertising up to level 5 of the building offering an exclusive opportunity for advertising.

See Appendix III – London Hot Spots

Chiswick Roundabout – Key Features of the Office Offer

The proposed office offer is multi-storey with an open ground floor atrium that will provide dedicated entrance areas for both the residential and office space as well as providing flexible retail / restaurant space (A1/A3 Use Class). The atrium enables pedestrian access link from the Brentford/Kew Bridge areas through to the current B&Q site. The office element of the building is set out across the 2nd floor to 5th floors and in total comprises 4,608sqm or 49,600 sqft GIA.

The proposition is considered to be relatively unique to the area and against a robust West London office market. Regardless, there are a number of factors that occupiers consider that are relatively well addressed by Chiswick Roundabout;

• Accessibility: This is key for occupiers and it is vital to demonstrate how accessible this site is both by foot and by car with easy access to public transport.

• On-site amenity provision: There is a proposed café and dedicated external amenity area.

• A sense of arrival: The use of the ground floor atrium will offer this.

• Floorplates – whilst what is proposed is irregular, the floor plate depth looks sensible to corridor and partition. This is very different to the likes of say Chiswick Park, but there is demand at the smaller end and whilst not conventional, it is not beyond possibility that the building could either let to a single tenant. The way people work is changing and there has been a significant shift in the way that occupiers use their space. The market has changed and occupiers and fit out contractors are a lot more innovative when it comes to designing new space. We are seeing occupiers move away from the traditional mode of desktop working as workers become more mobile, open plan hot-desking is now a preferred choice by occupiers which promotes collaboration among staff.

• Flexible M&E: Floorplates allow for (at least) 1:10 sq m occupational density.

• BREEAM: Important consideration given the location and the Development will achieve `Excellent’.

• Parking Provision: There are 62 cycle spaces for office use, accessed via dedicated cycle lift. There are 6 car parking spaces for the office element within the automated car parking system and 2 standard car parking spaces. There is also provision for two car club spaces, for use by office tenants and residents. There are also a number of motor cycle bays.

• Shower Facilities: Each floor accommodates a `his’ and `hers’ show facility.

Potential – Assuming Serviced Offices and Collaborative Workspace Looking specifically at Chiswick Park from a serviced office perspective, the Regus space at this location has been one of their most successful centres in the UK although it is worth noting this is because Chiswick Park really does offer a superb business community outside of London with good transport links in to the City. Therefore it is assumed that whilst co-working is a different model, the Site should attract interest from the same pool of tenants ie start-up firms and small business particularly in the creative, design, media and IT industries. See Appendix IV – LB Hounslow Locational Analysis Notwithstanding, the serviced market can be volatile and highly sensitive to economic change so it is extremely early to speak to providers given that the Development will not be delivered until c. 2019 as they typically would not sign a pre-let any further out than 8-12 months. Therefore, it is important for the Developments office offer to remain flexible and adaptable to ensure minimal void periods.

Conclusion

Chiswick Roundabout is an attractive but unusual proposition for office occupiers and will be delivered into a market which is defined by five characteristics:

1. The dwindling availability of standing stock and future development pipeline in Central and Greater London. With the exception of the City, occupiers and serviced office operators are still reluctant to embrace the pre-let concept. The unusual configuration of the building and mixed use site is not conventionally appealing. However, as outlined the potential for a WeWork/collaborative work place solution is attractive and will be increasingly appealing.

2. Increasing levels of named demand and an emergence of a culture of building/ site grabbing for future protection against rapid growth. For example Google and Amazon. Overflow flexible solutions are thin on the ground in key fringe locations.

3. A combination of the first two trends has led to ever higher rental growth within Central London such as Victoria and Paddington are exposing occupiers to increasingly high occupational costs. The regeneration of Brentford and other Hounslow Borough centres is seeing erosion of more affordable office stock typically favoured by start-up/smaller businesses.

4. Decentralisation of larger office occupiers and in particular support functions to cost efficient and well- connected locations with access to workers. Strategic dispersal.

The Development has unique selling points which will help the success of its office offer:

1. Landmark building – a tall building of striking design visible from the M4 approach.

2. Advertising potential – unrivalled opportunity for occupier and third party advertising as potentially ideal ‘product/placement’.

3. Viability of the overall scheme is underpinned by demand for well, specified, flexible office space in an under supplied market; reported housing supply outstripped by demand in LB Hounslow and increasing demand for advertising along the Golden Mile. The scheme is now insulated by its multitude of uses (office, residential, advertising and retail) in an emerging regeneration location.

4. Gateway to London – The building completes the reinstatement of the Golden Mile as the new “Capital Gateway”.

5. General aspirations to regenerate this West London area.

Appendix 1 Chiswick and Brentford Supply, Demand and Take-up Schedules

SAMPLE OF MARKET ENQUIRIES ______

ENQUIRY REQUIREMENT AREA OF SEARCH DESCRIPTION DATE November 2015 8,500 – 10,000 Chiswick, Hammersmith Media Client looking for space in Chiswick area.

November 2015 8,000 Hammersmith, Chiswick, Ealing, Sony Mobile looking at options due to a lease event. Brentford

November 2015 4,000 Brentford area Samsung, negotiating exit with current Landlord. Viewed options in West London.

November 2015 6,500-9,500 Hammersmith, Chiswick, Ealing, Looking from North Kensington out to Ealing/Brentford to include Shepherds Bush, Acton, Shepherds Bush, North Kensington Hammersmith and Chiswick. and Brentford October 2015 7,000 – 10,000 West London - Paddington, Occupier looking for space in West London Shepherd's Bush, Hammersmith, Chiswick October 2015 10,000 – 40,000 Hounslow, Twickenham, Sunbury, Business centre operator looking for 10,000 to 40,000 sq ft. Chiswick, Brentford

September 2015 2,500 Twickenham to Brentford Driving test centre.

August 2015 2,000 – 2,500 Hammersmith, Chiswick and Looking to set up their first office in the UK. Will require a break at year 3 to offer flexibility for Brentford. expansion. Have sent details and expect to view next week.

August 2015 c. 10,000 sq ft West London Currently based in Chiswick, but looking further west due to high quoting rents for impending lease renewal. Viewing 01/09 – 6th/7th + 11th floor.

August 2015 2,000 – 2,500 Brentford and surrounds Currently based in serviced offices in Brentford.

SAMPLE OF MARKET ENQUIRIES ______

August 2015 8,000 – 10,000 New Malden, Kingston, Brentford, Based in Twickenham but early stages due to lease expiry in July next year. Hounslow, Heathrow.

August 2015 2,500 – 4,500 West / South West London Looking for offices to house new Amazon TV programme.

August 2015 5,000 – 7,000 Hounslow and Kingston Looking for offices within Hounslow and Kingston boroughs. Details sent and awaiting feedback.

August 2015 c. 750 West London Potentially interested in ground floor suites, but would ideally like something economical.

August 2015 5,500 – 7,500 City, West End, West London, Large search area, but details requested as Brentford is being considered. Heathrow and Uxbridge

August 2015 2,000 – 2,500 Brentford and surrounding areas Looking for alternative office space due to increase in rents in current building.

July 2015 2,000 – 4,000 Heathrow and surrounds Heathrow occupier looking to relocate in Q4 2015. Good access to Heathrow required.

July 2015 2,000 – 3,000 West London Currently located on Chiswick Park and, having been acquired by another company, are having to downsize and cut costs. Good transport links to central London are key.

July 2015 1,800 – 2,200 Heathrow and surrounds Will consider all locations with good connectivity to the airport.

June 2015 1,500 – 3,000 Brentford Looking for open-plan office space in Brentford, ideally close to public transport. Details sent and awaiting feedback.

May 2015 600 Hounslow and Brentford Small office requirement.

SAMPLE OF MARKET ENQUIRIES ______

May 2015 2,000-4,000 West London with good access to French food distribution company looking for up 4,000. Details sent. Now looking more Heathrow centrally – Chiswick, Hammersmith.

May 2015 3,500-5,000 Hammersmith - Heathrow Satellite office that will grow substantially so a short term lease preferred (18 months min – 30 months max). Have sent details. Reported but now under review.

Chiswick Roundabout Site Supply

Chiswick, Power Road, Golden Mile and Brentford

Prepared by

December 2015

Page 1 of 7

Chiswick

Address Floors & Charges Description/Amenities

Bond House, 347 – 353 Floor sqft • Air conditioning Chiswick High Road • Raised floors Fourth floor 5,403 • Suspended ceilings Third floor 5,403 • Two passenger lifts Second floor 5,403 • Outdoor amenity space First floor 5,403 • 40 car parking spaces Ground floor 4,535

Total 26,793

McCormack House, Floor sqft • VAV air-conditioning Burlington Lane, Chiswick • Suspended ceilings W4 Fifth floor 12,163 • Raised floors Fourth floor 14,904 • Three passenger lifts & service lift Third floor 14,729 • 90 car spaces (ratio 1:679 sq ft) Second floor 17,144 First floor 82 Ground floor reception 2,087

Total 61,109

Chiswick Green, 610 – 624 Chiswick High Road Floor sqft • BREEAM ‘Excellent’ rating with EPC ‘B’ • 4 pipe fan coil air-conditioning Second floor 5,600 • Full access raised floors • LG7 compliant lighting Total 5,600 • In-house café • Showers & locker facilities • Bicycle stands • 3 x 13 person lifts & goods lift

Page 2 of 7 The Building, 578 – 586 Chiswick High Road Floor sqft • Double height reception • BREEAM rating ‘Very Good’ Second floor 5,126 • Shower facilities • Full access 150mm raised floors Total 5,126 • Suspended ceilings • 2 secure on site car parking spaces • 4 pipe fan coil air conditioning • 2 x 8 person passenger lifts

Building 12, Chiswick Park, 566 Chiswick High Road Floor sqft • Air Displacement System for Heating and cooling Ground floor 18,158 • Perimeter Under Floor Heating • Fully Accessible Raised Floors (400mm clear Total 18,158 void) • Metal Tile Suspended Ceilings • 3 x 16 Passenger Lifts • 1x Goods lift

• On-site Car Parking at 1:1015 sq ft • EPC Rating ‘D’ • Bicycle Storage

Building 6, Chiswick Park Floor sqft • High quality fully fitted plug and play office accommodation First floor 6,674 • Air displacement system for heating and Ground floor 10,258 cooling • Generous 3.0m floor-to-ceiling height Total 16,932 • Shower Facilities and locker use • 24 hour security

• Energy Performance Certificate ‘B’ • ‘BREEAM’ Rating ‘Excellent’ • Car Parking Available

Page 3 of 7 Building 7, Chiswick Park Floor sqft • LG7 Lighting • 3 meter floor to ceiling height Eleventh floor 24,370 • Suspended ceiling Tenth floor 28,120 • 4 pipe VAV air conditioning Ninth floor 28,120 • 8 x 21 person lift Eighth floor 28,095 • Showers Seventh floor 28.095 • Cycle storage Sixth floor 28,060 • 246 car parking Fifth floor 28,060 • BREEAM ‘Excellent’ Fourth floor 28,060 • Third floor 28,060 EPC B Second floor 28,040 First floor 25,375 Ground floor 24,370 Reception 3,170

Total 333,720

Building 5, Chiswick Park Floor sqft • LG7 Lighting • Air displacement system for heating and Part third floor 6,061 cooling • 3 meter floor to ceiling height Total 6,061 • Suspended ceiling • Raised floor • 3 x 16 person lift • 1 x goods lift

• Showers

• Cycle storage • Car parking available • EPC C

Chiswick Tower, 389 Floor sqft • 4 pipe fan coil air conditioning Chiswick High Road • 5 x passenger lift East 14th floor 6,061 • Plastered ceiling East 12th floor 5,011 • Suspended LED lighting • On site Café Total 11,072 • Showers • Bike storage • Car parking available

Page 4 of 7

23 Eyot Gardens, Stamford Floor sqft • Four-pipe fan coil air-conditioning Brook • Raised Floors (170mm clear void) Second floor 8,328 • Suspended metal tiled ceilings • Two passenger lifts (10 person) Total 8,328 • Shower facilities • LG7 Style Lighting • Car parking spaces available on separate licence

Power Road Studios, 114 Floor sqft • Up to 40 car parking spaces Power Road, Chiswick • Air-Conditioning Second floor 5,690 • Raised floor (first & second floors) First floor 5,244 • 3 compartment perimeter trunking to most Ground floor 6,065 areas, • 6 person passenger lift Total 16,999 • EPC E

• Shared courtyard and cafe, • Mix of spot, track and inset lighting

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Brentford

Address Floors & Charges Description/Amenities

Vantage West, Great West Floor sqft • Remodelled double height reception Road, Brentford • Air conditioning Part Eleventh floor 3,850 • Suspended ceilings Tenth floor Let • Raised floor Ninth floor 8,554 • LG7 lighting Eighth floor 8,551 • 4 high speed passenger lifts Seventh floor 8,540 • Goods lift Sixth floor 8,541 • Excellent parking ratio of 1:315 sq ft Fifth floor 8,538 • On site restaurant Fourth floor 8,525 • Third floor 8,491 On site gym Second floor 10,969 • Bike racks First floor 14,091 • Showers Ground floor 8,600 Reception 1,286 *Available from May 2016

Total 98,518

27 Great West Road, Floor sqft • 4 pipe fan coil air conditioning Brentford • Suspended ceilings Third floor 15,672 • Full accessed raised floors • 2 passenger lift(s) Total 15,672 • On site cafe/restaurant • Separate reception • Secure on site car parking (1:395 sq ft)

• EPC C

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The Mille, 1000 Great West Floor sqft • Air conditioning Road, Brentford • LG7 compliant lighting Part Eleventh floor 4,000 • Excellent natural light Part Eleventh floor 2,880 • Underfloor trunking Seventh floor 8,312 • On site car parking ratio 1:408 sq ft Sixth floor 8,312 • On site cafe Fourth floor 3,892 • 24 hour access and security Ground floor 1,427 • Covered cycle racks and showers

• An EPC rating of D (100) Total 28,823

Profile West, Brentford Floor sqft • Accessible raised floors (250mm) • Car parking ratio of 1:350 sqft Fifth floor 7,310 • Cycle parking Second floor 1,108 • Flexible floor plate First floor 3,396 • Floor to ceiling height of 2.65 m Ground floor 4,123 • Fully air-conditioned • Integrated CAT II lighting Total 15,937 • Metal tiled suspended ceilings

• Two 13-person lifts

Brentside Park, Brentford Floor sqft • New VRV air-conditioning • Full access raised floors First floor 13,410 • Suspended ceilings Ground floor 13,045 • LG3 lighting Reception 387 • Impressive reception and entrance foyer • Fully carpeted Total 26,842 • Antiglare double glazing

• 12 person passenger lift

• 90 car parking spaces (1:298 sq ft) • EPC rating B (50)

Page 7 of 7

Appendix 2 Serviced Office Update

Serviced office update Serviced office take-up | 1996 - 2015

Serviced office/Co Working take-up 2012 - 2015 0.9 9% Serviced office/Co-working No. of Total sq ft provider transactions 0.8 8% The Office Group 344,241 10

Millions sq ft WeWork 342,163 5 0.7 7% I2 Offices 312,943 18 Regus 134,617 8 0.6 6% Instant Offices 123,672 8 Serviced Office Group 105,514 3 Office Space in Town 92,120 3 0.5 5% Executive Offices Group 69,244 4 NeueHouse 64,661 1 0.4 4% Target Space 45,662 3 ETC Venues 44,212 4 Orega Services Offices 44,019 3 0.3 3% Ventia 39,505 5 One Avenue Group 39,374 2 0.2 2% Avanta Managed Services 29,107 1 Servcorp 27,020 2 TechHub 20,331 1 0.1 1% Cabinet Lounge 18,772 1 Prospect Business Centres 18,251 2 0.0 0% Landmark 18,220 2 Level 39 15,001 1

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Business Environment 13,374 1 Source: JLL City Docks WE Share of overall take-up Hoxton Mix 5,460 1 Serviced office deals | 2015

SUGAR BUILDING, EC4 ADELPHI, JOHN ADAM ALBERT HOUSE, 1-4 1 CANADA SQUARE, E14 STREET, WC2 SINGER STREET, EC2

London Executive Offices NeueHouse The Office Group UK Level 39

40,126 sq ft 60,177 sq ft sq ft 49,523 sq ft 26,000 sq ft 1st – 7th floors 1st – 2nd floors Entire building 39th floor £83.00 psf £70 psf (quoting) £39.50 psf Additional 40,323 sq ft 15 year term Under construction 15 year term 24fth & 42nd floors 10th year break Serviced OfficesOffice Costs– Central London

• Serviced office operators occupy approximately 4 million sq ft across Central London in 300 separate locations.

• Letting activity from service office operators increased 144% in 2013 Serviced Office Uptake (sq ft)

• Exceptional take-up levels continued into 2014. In total, 414,485 sq ft in 19 deals!!

• Main issue in 2015 – low vacancy rates and a lack of supply!

• Serviced Office rates increase 15% in 2014 – this has continued in 2015 thus far with rates increasing 20%

Recent Central London Deals 2014

Date Address Demise Area (Sq ft) Rent (£ psf) Occupier (Basement- LEO (London Executive Nov-14 14 Curzon Street, W1 10,568 £126.05 Serviced Office Providers historically 5th) Offices LEO (London Executive take 10-30,000 sq ft Sep-14 23 King Street, SW1 (1st-3rd) 23,146 £102.50 Offices th Aug-14 12 Hay Hill, W1 (LG-4 ) 18,772 £90.00 Cabinet Lounge (Russia) New ‘Incubator’ providers are taking th Dec-14 Cannon Place, EC4 (4 ) 25,101 £60.00 I2 Office up to 100,000 sq ft, such as, WeWork Dec-14 199 Bishopsgate, EC2 (1-4th & 9) 61,227 £50.00 WeWork £52.50 & Oct-14 6 Bevis Marks, EC3 (1st & 12th) 20,300 I2 Office £62.00

4 Serviced Offices | Market Overview

Core locations Camden

Areas of growth Euston/ Regent’s Park Kings Cross Northern Fringe Marylebone Bloomsbury North of Noho City North Oxford Street Midtown West Covent Central Paddington Soho Garden East Mayfair Hyde Park South Bank

Belgravia/ Victoria Knightsbridge Hammersmith Kensington/Chelsea

Workstation ranges (per workstation per month) W1 £800-£2,500 Midtown £600-£850 City Core £550-£1,250

5 Serviced Offices – why has activity increased?

• Economic Environment and Flexibility: An upturn = new ventures = growth = serviced office flexibility. • Cost: Traditional office leases are unaffordable for many companies, particularly when you factor in fit-out, legal costs and deposits. • Lease length and covenant: Start-up companies and SME’s generally require shorter leases and have a weaker covenant than traditional occupiers. • Product: There is a serviced office operator to suit all budgets. • Emerging Markets: Traditional providers apprehensive to enter emerging markets, new co-working providers are embracing these markets as the future.

6 Serviced Offices – How the market is changing…..

- With the growth of the TMT sector, the face of serviced offices is changing with many new ‘collaborative’ providers - There is still a strong market for the traditional providers due to the need for flexibility. - Companies like WeWork, Central Working and The Office Group - An ‘incubator’ concept to assist the growth of entrepreneurial companies - Hot-desking is now becoming a major factor! - Large space requirements in traditional and emerging markets! - JLL – ‘the serviced office market and co-working market will become one larger market with options for all industries within 12-24 months’

7 Co-Working and Shared Space

• There have been a number of new co-working entrants to the UK serviced office market: - WeWork - Central Working - Second Home - Spaces (Regus partner) - Co-work - Neuehouse - Huckletree - The Office Group (large serviced office provider that also offer shared space) - Please see http://www.coworkinglondon.com/ for full directory across London

- WeWork are by far the largest co-working provider in London and currently occupy around 200,000 sq ft and also have a further 250,000 sq ft under offer and due to open before the end of 2015. - Spaces (a Dutch co-working firm) have partnered with Regus and just opened its first centre in London, Regus have further ideas to assist them to expand this brand and portfolio over the next 12-24 months.

8 Serviced Offices – fit-out examples…..The Office Group

9 Serviced Offices – fit-out examples…..i2Office, WeWork….. i2Office WeWork (and other coworking providers)

10 Serviced Offices – fit-out examples…..London Executive Offices…..

Appendix 3 London Hot Spots

Appendix 4 LB Hounslow Location Analysis Our PowerPoint templates are based on a square grid. On title slides, the grid positions the image and logo proportionally.

Title slide images must be square and should not be resized. Images can be photography or illustration, sourced from the JLL Brand Hub.

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LB Hounslow Location Analysis

November 2015 Table of Contents

Introduction 3 Executive Summary 4 Accessibility & Demographics 5 - Transport Accessibility – Public and Private 6 - Age Demographics – Private Transport 7 - Age Demographics – Public Transport 8 - Population Overview 9 Access To Talent 10 - Highly Educated Population – Private Transport 11 - Highly Educated Population – Public Transport 12 - ICT Sector – Private Transport 13 - ICT Sector – Public Transport 14 - ICT Sector – Employment Growth 15 - Education & ICT Sector Overview 16 - Data Sources 18 Introduction

Purpose of Report • We would like to give you further insight into Chiswick Roundabout Site Hounslow as a suitable business location and we have focused on:- • Demographics • Accessibility of talent

Mapping Assumptions • Data has been collected and analysed from various sources, considering a wide range of indicators and criteria. • The analysis examines various datasets using public and private transportation modelling. • Public transport modes include train, tube, overground, DLR and bus. • In calculating commute times by public and private transport, analysis and models consider all possible routes from which the fastest is selected.

3 Executive Summary

• Overall, Chiswick Roundabout Site is a well connected location in terms of both public and private transport, with good access to a highly educated workforce. It is also well positioned to access existing labour pools and take advantage of the increasing number of graduates in IT/Computer related fields which dominate the small business sector. Key Highlights

• LB Hounslow has a high density of population within the ages of 25 – 34 compared with other areas in the region. For expanding businesses, the largest demand for talent will fall within this 25-34 age banding. • A large proportion of London and the surrounding region, within the transport catchment bands from Chiswick Roundabout Site, have 60%+ of the working population with tertiary qualifications. This indicates that the labour pools in and around LB Hounslow are highly educated and accessible. • LB Hounslow is also one of the key London Boroughs identified as having high ICT employment growth over the next 5 years (2.5-5%).

4 ACCESSIBILITY & DEMOGRAPHICS Transport Accessibility – Public and Private

Fig 1: Comparison between public and private 15, 30, and 60 minute journey catchments from Chiswick Roundabout Site Note: • Coloured areas represent Public Transport Catchment Areas (15, 30, 60 mins). • Black lines represent Private Transport Catchment Areas (15, 30, 60 mins).

15, 30 and 60 min Public Transport catchment

6 Age Demographics – Private Transport

Fig 2: The proportion of the total population aged between 25 and 34 years within a 15, 30 and 60 minute private transport catchment Note: • Coloured areas represent population density. The darker colours indicate a higher density. • Black lines represent Private Transport Catchment Areas (15, 30, 60 mins).

7 Age Demographics – Public Transport

Fig 3: The proportion of the total population aged between 25 and 34 years within a 15, 30 and 60 minute public transport catchment Note: • Coloured areas represent population density. The darker colours indicate a higher density. • Black lines represent Public Transport Catchment Areas (15, 30, 60 mins).

8 Population Overview

Fig 4: Total population within a 15, 30 and 60 minute public transport catchment from Chiswick Roundabout Site Key Points: Population Within 15 Within 30 Within 60 % for area % for area % for area Public transport accessibility to LB Hounslow by Age Minutes Minutes Minutes • is good, with a large proportion of Central and 0 to 4 8,915 8% 34,385 8% 211,983 7% Greater London accessible within a 60 minute 5 to 14 12,846 11% 51,213 12% 326,211 11% journey time. 15 to 24 13,939 12% 51,725 12% 356,184 12% • The population aged 25 to 34 within LB 25 to 34 24,392 22% 81,311 19% 598,329 20% Hounslow accounts for 20% of total borough 35 to 44 17,234 15% 68,529 16% 477,054 16% population. 45 to 54 13,079 12% 54,871 13% 384,392 13% • LB Hounslow has a high density of population 55 to 64 9,774 9% 39,497 9% 267,752 9% within the ages of 25 – 34 (Figures 3 & 4) 65 + 12,065 11% 48,810 11% 355,637 12% compared with other areas of the region. Total 112,244 100% 430,341 100% 2,977,542 100% • Within a 30 minute public transport journey time from Chiswick Roundabout, 48% of the Fig 5: Total Population within Hounslow Borough population are aged between 25 and 54. Population by Hounslow % for area Age • Within a 60 minute public transport journey time from Chiswick Roundabout Site, c.50% of 0 to 4 21,253 8% the population are aged between 25 and 54 – 5 to 14 30,837 12% c. 1.5 million population. 15 to 24 32,169 12% 25 to 34 54,516 20% • For expanding businesses, the largest 35 to 44 42,172 16% demand for talent will fall within the 25-34 age banding. 45 to 54 32,986 12% 55 to 64 23,910 9% 65 + 28,772 11% Total 266,615 100%

Working Age Population 9 ACCESS TO TALENT Highly Educated Population – Private Transport

Fig 6: The proportion of the total population with a high level of qualification within a 15, 30 and 60 minute private transport catchment Note: • High level of qualification is defined as degree level or above. • Coloured areas represent density. The darker colours indicate a higher proportion of population with a high level of qualification • Black lines represent Private Transport Catchment Areas (15, 30, 60 mins).

11 Highly Educated Population – Public Transport

Fig 7: The proportion of the total population with a high level of qualification within a 15, 30 and 60 minute public transport catchment Note: • High level of qualification is defined as degree level or above. • Coloured areas represent density. The darker colours indicate a higher proportion of population with a high level of qualification • Black lines represent Chiswick Public Transport Roundabout Site Catchment Areas (15, 30, 60 mins).

12 ICT Sector – Private Transport Fig 9: The proportion of the total population working within the ICT Sector within a 15, 30 and 60 minute private transport catchment Note: • Information and Communication is defined as the Information, Communication and Technology Sector (ICT). • Coloured areas represent density. The darker colours indicate a higher proportion of population working within the ICT Sector. • Black lines represent Private Transport Catchment Areas (15, 30, 60 mins).

13 ICT Sector – Public Transport Fig 10: The proportion of the total population working within the ICT Sector within a 15, 30 and 60 minute public transport catchment Note: • Information and Communication is defined as the Information, Communication and Technology Sector (ICT). • Coloured areas represent density. The darker colours indicate a higher proportion of population working within the ICT Sector. • Black lines represent Public Transport Catchment Areas (15, 30, 60 mins).

14 ICT Sector – Employment Growth Fig 11: Employment in the ICT sector in 2014 and estimated employment in 2019 by London Borough

Note: • Coloured areas represent estimated ICT employment growth. The darker colours indicate a higher growth rate. • Black lines represent public transport Catchment Areas (15, Hillingdon 30, 60 mins).

Hounslow

15 Education & ICT Sector Overview (2)

• LB Hounslow is one of the key London Boroughs identified as having high ICT employment growth over the next 5 years (2.5-5%)

• A high number of ICT employment growth areas can be reached within a 60 minute public transport commute of Chiswick Roundabout Site, providing good access to existing and growing labour pools.

• A large proportion of London and the surrounding areas, accessible within the transport catchment bands, have 60%+ of the working population with tertiary qualifications. This indicates that the labour pools in and around Hounslow are highly educated and accessible.

• In terms of private transport, large areas in the Western Corridor are also accessible. A large proportion of these areas have relatively high levels of ICT workers due to an existing presence of IT & Technology companies. This indicates that there are existing labour pools that can be accessed outside of London for companies within Hounslow.

16 Education & ICT Sector Overview (3) London Talent

• Businesses in London have access to a constant stream of exceptionally well-qualified graduates. • 70% of London students stay in the city after graduation to find employment. • In 2012, there were 368,000 IT professionals in London, and an estimated 540,000 within Greater London and the South East • London concentrates 25% of all England IT&Telecom professionals; it is also predicted to account for a third of England’s total growth by 2019. Forecasts to 2020 show an increase in all job titles, with a particular emphasis on software developers. • Demand is exceptionally high across all software development skillsets; London has the greatest volume of this sort of talent across the major European cities. • London is a centre of academic excellence: access to its network of higher education institutions, gives businesses in London access to a constant stream of exceptionally well-qualified graduates. 20,000+ students studying computer sciences. • London’s depth of employment opportunities pulls 50% of all graduates from the UK’s higher education institutions to the capital city. • London’s workforce is extremely productive, adding 40% more value than the national average.

17 Data Sources

• GLA (datastore) • ONS • Annual Population Survey, ONS • 2011 Census • Dfe NCCIS and Connexions • DWP Benefits, NOMIS • Annual Survey of Hours and Earnings • IDBR, ONS • ONS Business Demographics • London Fire Brigade • London Ambulance Service • Active People Survey • Indices of Multiple Deprivation, CLG • DfE • APS • GLA • Metropolitan Police • Oxford Economics • CACI, Acorn

Appendix 5 JLL Western Corridor Report

Western Corridor Office Market Report

West London & Thames Valley regions UK Office Research | H1 September 2015 Western Corridor outlook

£ £ £ £ Solid economic growth Supply & pipeline Domestic economic momentum remains robust. While GDP growth Supply levels continue to contract with both take-up and conversion to of 0.4% in Q1 was below the 2014 pace, growth picked up in Q2 to alternative uses stripping supply downwards, falling 10.0% year-on-year. 0.7% led by a strong performance from the services sector. Looking The West London market remains more constrained with an overall ahead, with rising real wages, sustained momentum in retail sales vacancy rate of 5.9% compared to 17.8% for the Thames Valley. and business confidence, growth should continue at a brisk pace A shortage of available Grade A space is the pinch point in many across the Western Corridor and wider UK in H2. Western Corridor towns with a vacancy rate of just 2.5% in West London. Rapid recent strengthening in employment is a key factor driving A healthy level of speculative development is responding to the Grade A growth in the Western Corridor office market. Office employment shortage in some markets with 2.7 million sq ft under construction at grew by 5.5% in 2014 and is forecast to maintain steady development mid-2015. However, all but 400,000 sq ft of this space is due to complete over the next 5 years, averaging 2% per annum. over 2015/16, hinting at a shortfall into 2017 and beyond unless further speculative commitments are made in the near term. £ £ Market confidence leans to strong H2 £ £ After a disappointing 2014, occupier activity gained momentum Rents in H1 2015 boosted by robust business confidence and a strong Prime rental growth continues across the Western Corridor with employment market. The latter half of 2015 is expected to outperform annual growth at mid-2015 of 5.5% and an average prime rent of H1. The recent 186,000 sq ft letting to SSE at Forbury Place Reading £32.25 sq ft. With strong demand and constrained Grade A supply in and the 4.1 million sq ft of named active demand provide evidence some markets further rental growth is expected over the remainder of of this expected activity. As a result 2015 take-up should exceed the 2015. JLL forecasts Western Corridor rents to see sustained growth 10-year annual average of 2.3 million sq ft. over the next five years (2015-2019) with average annual growth of A large number of smaller deals dominated H1. The distribution 4.4%, with Bracknell expected to show the strongest growth. of take-up was evenly split, with West London accounting for 52% by floorspace. The TMT sector accounted for the majority of H1 activity (42%) “We are faced with a looming mismatch followed by service industries (19%). Despite a quiet period of activity in supply and demand as eroding in the Western Corridor for manufacturing-based occupiers, this sector is driving named demand, totalling 37% of the 4.1 million sq ft active in supply levels impact on choice and the market. tenant demand strengthens.”

Ben Burston Head of UK Office Research

2 | Western Corridor Office Market Report H1 September 2015 Take-up On track to exceed 2014 by 25%

3,500 West London Thames Valley 10 year Western Corridor average H2 forecast

3,000

2,500

2,000

000 sq ft 1,500

1,000

500

0 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 H1

Take-up by sector, H1 2015 Speculative development on site

Professional Services 51,000 sq ft West London Thames Valley Q2 2014 Q2 2014 Public Administration 66,000 sq ft 833,130 sq ft 740,870 sq ft Q2 2015 Q2 2015 Manufacturing 96,000 sq ft 1,601,530 sq ft 1,066,320 sq ft Banking & 172,000 sq ft Financial Services

Service Industries 208,000 sq ft

TMT 454,000 sq ft

Active demand (000’s sq ft) Strong 5,302 demand sq ft levels continue 4,067 sq ft 3,264 sq ft 2,971 2,302 sq ft sq ft

2011 Q4 2012 Q4 2013 Q4 2014 Q4 2015 Q2

Vacancy rates Average prime rents Supply is squeezed

West London Thames Valley Western Corridor West London Thames Valley Western Corridor Q2 2014 Q2 2014 Q2 2014 Mid 2014 Mid 2015 18.8% £35.57 psf £25.86 psf £30.71 psf 17.8% Q2 2015 Q2 2015 Q2 2015 Mid 2014 13.1% Mid 2015 £37.43 psf £27.07 psf £32.25 psf y-on-y y-on-y y-on-y Mid 2014 11.7% 7.7% Mid 2015 5.2% 4.7% 5.0% 5.9%

Western Corridor Office Market Report H1 September 2015 | 3 Western Corridor investment

The investment market in the Western Corridor has seen an exceptional Investment volumes ( £m) first half of the year. With £1.4bn transacted, this eclipses the total seen for 2014. Investor demand for good quality assets has been strong with a number of individual and portfolio deals occurring in 2015. 2011 £ £ £ £ £ £1,649 Furthermore, activity within the Western Corridor continues apace and Q3 volumes are looking high, we expect total volumes to reach closer to £3bn by the end of the year. Investors from the UK have been the most 2012 active over the year thus far, with UK based institutions and pooled funds £ £ £ £582£ accounting for over 80% of investment volumes in H1. The largest transaction over the year was Aberdeen Asset Management’s sale of New Square, Bedfont Lakes, Heathrow to M&G for £167m (5.46%). 2013 £2,138 Prime yields have continued to harden, shifting down by 50 basis £ £ £ £ £ £ points over the past year to now stand at 5.00% in West London. There remains a slight differential between the Thames Valley, with prime yields (Q2 2015) standing at 5.25%. 2014 £ £ £ £ £1,066 Activity within the market is expected to remain buoyant and well located, good quality space in the Western Corridor is highly sought after. As a result, we expect the weight of money to retain H1 2015 the pressure on prime yields, with further hardening expected by £ £ £ £ ££1,400 the end of the year.

Prime yield profile (%) Purchaser type by volume (%) H1 2015

West End City of London West London Thames Valley 8 7 59% 23% 7% 6

Institution Pooled Funds PropCos/Developers 5

4 £ 7% 2% 1% 1% 3 Unknown Private Non-profit Corporate – IT Q411 Q409 Q410 Q412 Q413 Q414 Q215

4 | Western Corridor Office Market Report H1 September 2015 Key transactions

JLL advised Aberdeen Asset Management Acting for Aker, the global oil and gas on this high profile disposal to M&G. company, JLL sub-let 74,500 sq ft at Bedfont Lakes comprises seven headquarters Building 6 Chiswick Park to IMG. office buildings and a central amenity This was the largest leasing deal in block totalling 375,972 sq ft. The property West London during 2014 and provided is multi let to eight tenants providing a IMG with a flexible occupation solution WAULT of 5.1 years and produces a rental and our clients with an excellent void New Square income of £9,643,441 per annum. Building 6 liability recovery rate. Bedfont Lakes, Chiswick Park, Heathrow Chiswick Price: £167m Size: 74,500 sq ft Vendor: Aberdeen Asset Lessor: Aker Management Lessee: IMG NIY: 5.46% James Finnis Mark Wilson Director Director South East Office Agency Capital Markets (National)

JLL advised Aviva Investors on the 187,405 Apex Plaza is a premier office building in sq ft acquisition of the Translation Building Reading town centre comprising 222,462 sq ft. within the White City Regeneration Area The building is multi-let to 18 tenants over for £152m providing a blend of office, 30 leases at a current passing rent of incubator and accelerator space. It is let £5,356,436 pa equating to £26.13 per sq ft. to Imperial College on a 25 year lease The property featured a number of asset with RPI increases. Imperial College, management angles and following competitive Translation Stanhope Plc, Berkeley Group and Westfield Apex Plaza, bidding, the property transacted at £91.6m. Building, are some of the companies committed to Reading JLL sold on behalf of M&G to LGIM in redeveloping the area with more than June 2015. White City Price: £91.6m £2 billion of new property. Vendor: Price: £152m M&G NIY: Purchaser: Aviva Investors 5.53% NIY: 3.41% Mark Wilson Angus Minford Director Director Capital Markets (National) Capital Markets (National)

Western Corridor Office Market Report H1 September 2015 | 5 GRADE A & YEAR-ON-YEAR RENTAL GROWTH Q2 2015

Bracknell Chiswick

Take-up Take-up

200,000 400,000

150,000 300,000

100,000 200,000

50,000 100,000

0 0 2011 2012 2013 2014 H1 2015 2011 2012 2013 2014 H1 2015 000 sq ft Take-up 5 year average (2010-14) 000 sq ft Take-up 5 year average (2010-14)

Supply (year-on-year change) Supply (year-on-year change)

Overall Grade A Overall Grade A vacancy vacancy vacancy vacancy Vacancy is stable at Vacancy Tide turns and 15% Tight market with 5.4% 3.6% space is absorbed down from 9.3% limited pipeline up from up from 19.1% 4.3% 2.1%

Prime rents and forecast Prime rents and forecast

Q2 2015 2015-2019 q-on-q 0.0%, £22.00 psf 8.3% annual per annum 1.0%

Q2 2015 2015-2019 q-on-q 2.3%, annual 2.3% £50.00 psf 2.5% per annum

Agent’s comment Bracknell remains an established office location Agent’s comment Chiswick Park continues to attract high profile for occupiers in search of good value, high quality corporates, including IMG in Q4 2014. Building office space. The market has been buoyant 7 Chiswick Park will deliver 330,000 sq ft providing resulting in less available Grade A stock, cementing a substantial building which could attract a major JLL’s forecast that this market will see the strongest occupier from the core London markets. growth over the next five years. The regeneration Ollie McLeod programme is underway and will boost local business confidence. Kate Clark

6 | Western Corridor Office Market Report H1 September 2015 GRADE A & YEAR-ON-YEAR RENTAL GROWTH Q2 2015

Hammersmith Heathrow

Take-up Take-up

300,000 400,000 350,000 250,000 300,000 200,000 250,000 150,000 200,000 150,000 100,000 100,000 50,000 50,000 0 0 2011 2012 2013 2014 H1 2015 2011 2012 2013 2014 H1 2015 000 sq ft Take-up 5 year average (2010-14) 000 sq ft Take-up 5 year average (2010-14)

Supply (year-on-year change) Supply (year-on-year change)

Overall Good Vacancy vacancy 0.9% Vacancy 502,830 level of Tightest market in the 1.7% Grade A Good quality space sq ft available Grade A Western Corridor down from vacancy characterises supply choice 2.8%

Prime rents and forecast Prime rents and forecast

H2 2015 2015-2019 q-on-q £52.50 psf 4.7% Q2 2015 2015-2019 per annum 0.0% £32.50 annual 3.7% psf 4.8% per annum q-on-q 1.9%, annual 8.2%

Agent’s comment Hammersmith connects the Western Corridor to central Agent’s comment Terminal 2 at Heathrow is now fully operational and London. Tenant demand in this location is supported Heathrow is delivering record passenger numbers. by outward-looking London occupiers willing to extend This infrastructure improvement is feeding out into their search criteria beyond options in core West End the Heathrow office market with Kuehne + Nagel and City postcodes. With delivery of 82,500 sq ft of taking 15,600 sq ft at 1 Roundwood Avenue at the large format, contemporary office space at 1 Queen highest recent rent achieved on Stockley Park. Caroline Street in Q3, we expect Hammersmith There is good supply coming through on the Park Grade A rents to rebase, edging closer to £60.00 psf. with a number of major refurbishments underway. Stuart Austin James Finnis

Western Corridor Office Market Report H1 September 2015 | 7 GRADE A & YEAR-ON-YEAR RENTAL GROWTH Q2 2015

Maidenhead Reading

Take-up Take-up

250,000 400,000

200,000 300,000 150,000 200,000 100,000

100,000 50,000

0 0 2011 2012 2013 2014 H1 2015 2011 2012 2013 2014 H1 2015 000 sq ft Take-up 5 year average (2010-14) 000 sq ft Take-up 5 year average (2010-14)

Supply (year-on-year change) Supply (year-on-year change)

Overall Grade A Overall Grade A vacancy vacancy vacancy is vacancy Vacancy is stable at Vacancy stable at Development activity 14.2% Active market, steady 6.8% providing new supply up from 9.0% supply of new space 12.8% 13.6%

Prime rents and forecast Prime rents and forecast

Q2 2015 2015-2019 q-on-q 1.5%, £34.50 psf 4.5% annual per annum 4.7%

Q2 2015 2015-2019 q-on-q 4.5%, annual 6.2% £33.50 psf 4.4% per annum

Agent’s comment Maidenhead has recovered from a poor 2014 Agent’s comment Reading is the dominant market in the Thames with a number of large lettings to the likes of Valley with many large corporates targeting the Maersk and Acenden this year, helping the market. Developers have committed to the town with town re-establish itself as one of the major office 1.1 million sq ft under construction or expected to start markets within the Western Corridor. The deals on a speculative basis, and we expect competition for show there is currently over a £10.00 psf difference this space to push prime rents up further. The arrival in Maidenhead town centre rents, compared to of Crossrail in 2019 in conjunction with electrification the out of town market. of the main line will encourage further activity. Matthew Parry Angus Currie

8 | Western Corridor Office Market Report H1 September 2015 GRADE A & YEAR-ON-YEAR RENTAL GROWTH Q2 2015

Slough Staines

Take-up Take-up

150,000 200,000

150,000 100,000 100,000

50,000 50,000

0 0 2011 2012 2013 2014 H1 2015 2011 2012 2013 2014 H1 2015 000 sq ft Take-up 5 year average (2010-14) 000 sq ft Take-up 5 year average (2010-14)

Supply (year-on-year change) Supply (year-on-year change)

Overall Grade A Overall Grade A vacancy vacancy vacancy vacancy Vacancy Vacancy New space Notable reduction in 20.7% 4.5% 9.3% 5.7% available supply down from falling from provides choice up from up from 26.3% 7.2% 6.6% 2.3%

Prime rents and forecast Prime rents and forecast

Q2 2015 2015-2019 q-on-q £27.50 psf 6.4% Q2 2015 2015-2019 per annum 0.0% £33.00 annual 2.9% psf 0.0% per annum q-on-q 0.0%, annual 5.8%

Agent’s comment The Heart of Slough improvements and the Agent’s comment The Staines market is well placed for an active H2. impending arrival of Crossrail have boosted the The speculative development pipeline has delivered town. Slough has lost over 6% of its office stock top quality space into a well located town. The through permitted development rights to residential. major pre-let to Gartner on The Causeway in There are a number of major schemes due for conjunction with the various lettings at 20 Kingston completion in 2016/2017, which will help to grow Road and 2 Pine Trees, has increased the take-up Slough’s position as a major office location along figures; the active named demand for the town the M4. should see this continue to rise through 2015. Charles West Matthew Swash

Western Corridor Office Market Report H1 September 2015 | 9 Issue to watch

JLL will be releasing a white paper in The Western Corridor is the key office location immediately surrounding London and the area benefits from having a developed the autumn assessing the changing market, strong talent pool and a comprehensive infrastructure pattern of office market activity network. As demographic, infrastructure and urbanisation trends unfold, how will these changes determine new growth hubs and within the Western Corridor and the the future development of the Western Corridor? emergence of new growth hubs. The report will examine the trends and assess the opportunities for the Western Corridor.

New employment Concentration of growth hubs employment on strong existing hubs

Cost driven strategic Infrastructure led dispersal from opportunities Central London

“With a strong economic outlook and the benefits of a number of planned infrastructure projects, the Western Corridor is well placed to take advantage of the evolving nature Barrie David of office demand.” UK Research

10 | Western Corridor Office Market Report H1 September 2015 Prime office rents, mid-2015

Grade A rents and year-on-year rental growth as at end-Q2 2015

£27.07 4.7% HIGH WYCOMBE THAMES VALLEY £37.43 5.2% M25 WEST LONDON

£34.50 6.2% £32.00 0.0% MAIDENHEAD £27.50 5.8% UXBRIDGE £50.00 1.0% SLOUGH £35.00 12.9% CHISWICK HOUNSLOW EALING M4 M4 BRENTFORD CENTRAL £33.50 4.7% WINDSOR HAMMERSMITH LONDON £32.50 4.8% £52.50 8.2% READING £31.50 1.6% M4 HEATHROW RICHMOND £22.00 2.3% STAINES BRACKNELL M25 £33.00 0.0%

WOKINGHAM CHERTSEY £18.50 2.8% CAMBERLEY

FARNBOROUGH

Western Corridor Office Market Report H1 September 2015 | 11 Contacts

Business contacts

James Finnis Angus Minford Mark Wilson Director Director Director South East Office Agency National Investment National Investment +44 (0) 20 8283 2534 +44 (0) 20 7087 5350 +44 (0) 20 7399 5874 james.finnis@eu.jll.com [email protected] [email protected]

Research contacts

Ben Burston Vicky Heath Barrie David UK Research UK Research UK Research +44 (0) 20 7399 5289 +44 (0) 117 930 5738 +44 (0) 20 7087 5165 [email protected] [email protected] [email protected]

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