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HEART OF JULY AREA PERFORMANCE OF LONDON AREA PERFORMANCE

CONTENTS JULY 2020 EDITION

INTRODUCTION 02 Welcome to our area performance report.

This monthly summary provides trends in footfall, spending SUMMARY ANALYSIS 03 and much more, in the Heart of London area. Focusing on , Circus, Haymarket, Piccadilly and FOOTFALL TRENDS 04 St James’s, find out exactly how our area has performed FOOTFALL OVERVIEW 05 throughout the month. HOURLY FOOTFALL 06 The report is available exclusively to members, and explores REGIONAL FOOTFALL 07 changes in trends that impact the performance of our area, allowing your business to plan with confidence and make the COVID-19 AND FOOTFALL 08 most of being in the heart of London. YOUR FEEDBACK IS IMPORTANT TO US PROPERTY & INVESTMENT 09 PLEASE CLICK ON THE BUTTON INVESTMENT 10 TO REQUEST NEW DATA OR ANALYSIS PROPERTY PERFORMANCE 11 LEASE AVAILABILITY 12

EVENTS & ACTIVITY 13 IMPACT CALENDAR 14 GLOSSARY 15 See our Glossary for more detail on data sources and definitions.

2 HEART OF LONDON AREA PERFORMANCE

SUMMARY ANALYSIS – JULY 2020

Rainfall (mm) 2020 2019 500K 25 YEAR ON YEAR FOOTFALL 450K -72% Footfall in the current month compared to the same month last year 400K 20

350K

300K 15 MONTH ON MONTH FOOTFALL 250K +97% Footfall in the current month compared

Footfall 200K 10 to the previous month Rainfall (mm) Rainfall 150K

100K 5 YEAR TO DATE FOOTFALL 50K -58% Footfall in the current year to date K 0 compared to the same period last year M T W T F S S M T W T F S S M T W T F S S M T W T F S S

6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 1 2 Week 28 Week 29 Week 30 Week 31

July trend summary

• Like-for-like footfall in the Heart of London area was down 72% in July 2020 compared to the same month last year. • Over 3.2 million visitors came to the area in July, a like-for-like increase of 97% compared to June. • Footfall in July has grown at the fastest clip since the beginning of lockdown, with the pace of monthly growth accelerating compared to May (+60%) and June (+61%). • Year-to-date, footfall in the Heart of London area is still down 58% compared to the same period in 2019. • The main cause of the shortfall is the slow pace of reopening of offices in the area, as well as the lack of international tourists due to the ongoing COVID-19 restrictions. • Saturday, 1st August, which also fell in the July reporting period, was the busiest day of the month with 176K visits to the Heart of London area. • Wednesday, 8th July, was the quietest day of the month with just under 77K visits. 3 FOOTFALL TRENDS HEART OF LONDON JULY FOOTFALL OVERVIEW

Heart of London Business Alliance has 9 footfall counter locations across our footprint (highlighted below). This map depicts the “Year on Year” trend (YoY) and “Year To Date” trend (YTD) for each of the locations. 5 counters are in Leicester Square & and 4 in Piccadilly & St James’s Cranbourn St. 2020 2019 2018 16M 14M YTD: -60% 12M New Coventry St. 10M YoY: -76% 8M YTD: -57% 6M 4M YoY: -68% 2M Shaftesbury Ave K Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD: -54% YTD: -64% Fig1. Three year comparative footfall totals for Heart of London area. YoY: -70% YoY: -78%

Piccadilly North Irving Street YTD: -62% YTD: -52%

YoY: -76% YoY: -67%

Piccadilly South YTD: -58% Regent St. St James’s YoY: -72% YTD: -45%

YoY: -67%

Jermyn Street YTD: -57%

YoY: -71%

5 PICCADILLY & ST. JAMES’S JULY HOURLY PROFILE

HOURLY FOOTFALL 40K 35K Distribution & Analysis 30K 25K 20K 15K 10K

Piccadilly & St James’s footfall profile ourly footfall volume 5K K

• Average hourly footfall fell by 72% year on year in the Total h 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 Piccadilly & St James’s area in July. This was an improvement Weekday Weekend from -80% in June. Source: Heart of London footfall counters, Piccadilly & St James’s only. • The weekends fared a little bit better than the average (Saturday: -69%) while weekdays were slightly behind (-73%).

• The most significant improvement, +167% month on month, was on Friday evenings (8:00 PM to midnight), as the night- LEICESTER SQUARE & PICCADILLY CIRCUS JULY HOURLY PROFILE time economy has returned to the area. 200K • Average hourly footfall on the weekends was 63% lower than on weekdays in the Piccadilly & St James’s area. 150K

100K Leicester Square & Piccadilly Circus footfall profile

50K

• In the Leicester Square & Piccadilly Circus area, average ourly footfall volume

hourly footfall also fell by 72% year on year (compared to K

-85% in June). Total h 00:00 01:00 02:00 03:00 04:00 05:00 06:00 07:00 08:00 09:00 10:00 11:00 12:00 13:00 14:00 15:00 16:00 17:00 18:00 19:00 20:00 21:00 22:00 23:00 • Biggest increase month on month was also on Friday nights, Weekday Weekend +260% between the hours of 8:00 PM and 4:00 AM. Source: Heart of London counters, Leicester Square and Piccadilly Circus only.

• Average hourly footfall on the weekends was 47% lower than on weekdays in the Leicester Square & Piccadilly Circus area. 6 HEART OF LONDON AREA: YEAR ON YEAR FOOTFALL COMPARISONS

Week Week Week Week Week July footfall grew by 96.8% month on month, accelerating the 27 28 29 30 31 positive post-lockdown momentum from +60.9% in June. This Heart of -82% -76% -72% -71% -68% was a third consecutive month of monthly footfall growth after London a sharp decline in April. UK High -58% -51% -48% -45% -44% Street Nationally, high street footfall trends also grew, albeit by a West End -75% -70% -67% -63% -63% more modest 56% in July. That said, high street footfall in the UK has already recovered to -47% year on year, while in the NB: Reporting set includes all Heart of London counting locations (9) Week number Heart of London area, footfall was still down 72% in July.

Other UK destinations also continued outperforming. Footfall LEICESTER SQUARE & PICCADILLY CIRCUS: YEAR ON YEAR in Retail Parks was down just 20% year on year in July, while Shopping Centres were down 42%.

Week Week Week Week Week 27 28 29 30 31 WEEKLY TRENDS LSQ -82% -76% -72% -71% -68% Weekly footfall trends were once again positive in the July UK High • -58% -51% -48% -45% -44% Street reporting period, which covered weeks 28-31.

West End -75% -70% -67% -63% -63% • In week on week terms, the beginning of the month saw the

NB: Includes only Leicester Square & Piccadilly Circus locations (5) strongest growth (week 28: +30%), which coincided with the Week number reopening of pubs, restaurants and some other leisure venues in the Heart of London area.

PICCADILLY & ST JAMES’S: YEAR ON YEAR • The remainder of the month also saw positive trends, although week 30 had a minor slowdown to just 4% weekly growth. Week Week Week Week Week 27 28 29 30 31 • Year to date, footfall in the Heart of London areas was down PIC & ST J -79% -74% -72% -70% -68% 58% compared to the same period a year ago. UK High -58% -51% -48% -45% -44% Street • Footfall performance was broadly similar in both Leicester Square & Piccadilly Circus area (July: -72% YoY, YTD: -58%) West End -75% -70% -67% -63% -63% and in Piccadilly & St James’s (July: -71% YoY, YTD: -55%). NB: Reporting set includes only Piccadilly & St. James’s locations (4) Week number

7 HEART OF LONDON AREA FOOTFALL AND UK COVID-19 CASES COVID-19 AND FOOTFALL 3.0M 350K 2.5M 300K 250K The impact of the lockdown on visitor trends 2.0M 200K 1.5M 150K 1.0M 100K 19 UK UK 19 Cases 500K 50K -

• COVID-19 pandemic has had a profound impact on Footfall 2020 K K

footfall within the Heart of London area. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 COVID February March April May June July • As the number of confirmed COVID-19 cases in the UK 2020 Footfall Confirmed UK COVID-19 cases grew from 94 at the end of February to 60,000 at the end of March, confidence in visiting public areas has declined. Sources: All 9x Heart of London footfall counters, Johns Hopkins University CSSE.

• Even before the start of the national lockdown on 23rd March and the worldwide cessation of international travel, footfall has already started falling rapidly. WEEKLY CHANGE IN FOOTFALL AND UK COVID-19 CASES • Weekly footfall started falling in mid-February, declining 60% 537% 600% 30% from 2.6 million (week 8) to 2.2 million (week 10). 40% 12% 500% 20% 400% • The biggest weekly declines occurred in weeks 11 (-64% 0% 10% week on week) and 12 (-75% week on week), ahead of -20% 4% 300% -40% the lockdown announcement on 23rd March. 200% -60% 53% 100% 4% 1% 2% 19 cases (WoW %)

-80% - • Average weekly footfall in the Heart of London area has -100% 0% fallen from ca. 2.3 million visits in January and February to 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 2020 Footfall 2020 Footfall (WoW %) just over 1 million in March. February March April May June July UK COVID UK

• In April, average weekly footfall has hit an all-time low of 2020 Footfall (WoW %) Confirmed UK COVID-19 cases (WoW %) 160K visits (-94% year on year). Sources: All 9x Heart of London footfall counters, Johns Hopkins University CSSE.

• After the gradual easing of lockdown restrictions in mid- May, average weekly footfall has grown back to 255K in May, 411K in June and 808K in July. 8 PROPERTY & INVESTMENT INVESTMENT – Q3 2020 TOP PURCHASERS (THE HEART OF LONDON AREA)

(£) Million Quarterly property transaction trends £0 £200 £400 £600 £800

Mr Abdulhadi Mana Al-Hajri • Appetite for commercial property in the Heart of London Cara Investment area has dimmed slightly in Q2 and Q3 of 2020, with just over £17 million exchanging hands in the second quarter The Crown Estate and no new sales transactions made in July. Mactaggart Family & Partners Sharps Pixley • This is down from £862 million in property sales in Q1, when Ellerman Investments sold the iconic Ritz Hotel on MCL Financial Group Piccadilly for £739 million to a Qatari investor.

NB: Purchases within the Heart of London area only, period: last 12 months • The sale of Ritz Hotel is the most significant property transaction in the Heart of London area since May 2018, TOP SELLERS (THE HEART OF LONDON AREA) when Reuben Brothers purchased the for an estimated £296 million. (£) Million The two transactions in Q2 this year included the sale of a £0 £200 £400 £600 £800 • leasehold in Bennet House on 54 St James’s Street to its Ellerman Investments current occupier, the and silver bullion house Sharps Pixley, as well as a sale of a mixed retail/office property on MassMutual 79 to a Hong Kong-based investor. The Blackstone Group John Lyon's Charity • Overall, there has been just under £1 billion in property transactions over the past 12 months (July 2019 – July Amsprop Estates 2020), compared to just over £350 million in the 12 Gold Group International months before that (July 2018 – July 2019).

NB: Sales for the Heart of London area only, period: last 12 months • Average price has also increased in the same period, from £1,338 per sq. ft two years ago to £1,794 per sq. ft in the past 12 months.

10 RETAIL AND OFFICE VACANCY RATE PROPERTY PERFORMANCE 12% 10% Office and retail vacancy rate in the Heart of London 8% area stood at 4.1% at the end of July, barely changed 6% from 4.2% in June. 4% 2% Net Absorption still remained negative, but has Vacancy Rate (%) 0% improved slightly to -1.5K sq. ft thanks to a decline in Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 vacancies in the sublet market.

2015 2016 2017 2018 2019 2020 • Average commercial rents remained unchanged RETAIL AND OFFICE RENTAL RATES compared to June at around £77.8 per sq. ft (+1% year on year) 90 • Average rents are now 11% down from their 2018 80 peak, when they reached as high as £87 per sq. ft. 70 • Inventory of property space stayed largely flat in

Rent (£/ft2) 60 recent years, with only one building (12.8K sq. ft) added in Q4 2019, a 4-floor office space on Suffolk 50 Street (Hobhouse). Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016 2017 2018 2019 2020 • There was one building still under construction as of Q3 2020 (ca. 192K sq. ft), The Londoner hotel on FLOORSPACE UNDER CONSTRUCTION Leicester Square. The 5-star hotel, owned by the Edwardian Group, 500K • was scheduled to be delivered earlier this year after 3 400K years of development, but the opening plans have 300K been interrupted by the COVID-19 pandemic. 200K • The new “super boutique” venue with 350 rooms 100K Floorspace Floorspace (ft2) and 35 suites is currently planning to open its doors in K early 2021. Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

2015 2016 2017 2018 2019 2020 11 HEART OF LONDON LEASE AVAILABILITY

Total Available Rentable Typical Floor Building Address Property Type Percent Leased Leasing Company Space (ft2) Area (ft2) Size (ft2) 25-26 Bury St Office 1 761 23 000 3 400 92 Levy Real Estate 32 Duke St Office 11 441 51 629 6 072 88 CBRE 3 Duke Of York St Office 449 2 731 455 84 Mellersh & Harding 66-68 Haymarket Office 956 16 774 2 238 94 BNP Paribas Real Estate UK 1 Jermyn St Office 120 000 149 795 16 643 20 Levy Real Estate 36-40 Jermyn St Office 11 541 75 000 9 969 89 BNP Paribas Real Estate UK 1 Mayfair Pl Office 4 324 173 940 18 211 99 Colliers / BNP Paribas Real Estate UK 1 Pall Mall East Office 4 000 75 229 9 604 95 JLL 39-40 Piccadilly Office 4 456 24 288 3 077 87 Monmouth Dean 15 Sackville St Office 8 272 35 141 6 087 92 Bluebook 25-27 Shaftesbury Ave Office 1 330 14 506 2 418 91 HNG 39-41 St James's St Office 2 289 30 402 2 815 92 Cushman & Wakefield 48-49 St James's St Office 1 580 15 728 1 965 90 HNG 25 Wardour St Retail 796 941 313 15 CDG Leisure 14-16 Waterloo Pl Office 3 101 16 931 2 718 82 Gerald Eve 17 Waterloo Pl Office 1 168 11 854 1 693 90 BNP Paribas Real Estate UK 1 Albemarle St Office 1 285 27 288 3 411 95 Allsop 22 Leicester Sq Retail 7 479 8 295 1 382 10 Shelley Sandzer 1 Sherwood St Office 109 998 142 000 20 285 23 Cushman & Wakefield 12 Waterloo Pl Office 10 193 33 436 4 761 93 BNP Paribas Real Estate UK

12 EVENTS & ACTIVITY EVENTS & ACTIVITY Events: July Date Area Impact Notes

WEST END IMPACT CALENDAR A protest march to raise public awareness of the ongoing crisis in Yemen, Protests and Demonstrations 12-Jul All Low from Portland Place to We want our members to be informed of foreign embassies and all the important dates, events and activities that have taken place in the past month and may have impacted your COVID-19 Lockdown: Moderate impact on business. Face masks become 24-Jul All Medium visitation, footfall up 6% mandatory to wear in stores week on week

COVID-19 Lockdown: A small number of gyms Indoor sports and leisure 25-Jul All Low reopened in the Heart facilities reopen of London area

Protest focused on the conflict between Impact key Protests and Demonstrations 28-Jul LSQ Low Azerbaijan and Armenia, with a march to High: Significant impact, on footfall and/or trade – review. Protest from Marble Protests and Demonstrations 2-Aug LSQ Low Medium: Potential impact on footfall and/or trade Arch to Parliament – be aware. Square

Low: Little impact to footfall and/or trade. For updates on future activity and events, email [email protected] to sign up to our weekly operational newsletter ‘The Update’.

14 GLOSSARY DATA SOURCES AND TERMINOLOGY

TERM DEFINITION USAGE

12 Month Absorption, defined as the net change in occupied space over a 12 month period, summing all positive Property 12 Month Absorption changes in occupancy (move ins) and subtracting all negative changes in occupancy (move outs).

Existing Inventory, the square footage of buildings that are able to be occupied by tenants. Does not include planned, Property Inventory and under construction space.

Under Construction, defined as the square footage of buildings that are in the process of being developed or Property Under Construction constructed.

A measurement expressed as a percentage of the total amount of physically vacant space divided by the total amount Vacancy Rate Property of existing inventory.

YoY Year on Year change in a particular value, such as sales or footfall. Sales, footfall, investment

Year to Date, meaning from January of the current year to latest reporting month, change in a particular value, such Sales, footfall, investment YTD as sales or footfall.

Rainfall (mm) Volume of rainfall within the West End on a given day or week in millimetres, sourced from local weather stations. Weather

DATA SOURCES DEFINITION USAGE

CoStar tracks UK’s commercial property sector, providing accurate and timely insight on commercial property CoStar Property and investment investment, sales and leasing activity at a highly granular level.

Springboard is a leading provider of retail performance insights, measuring footfall across most of UK’s high streets, Springboard Footfall shopping centres and retail parks.

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