HEART OF JUNE AREA PERFORMANCE OF LONDON AREA PERFORMANCE

CONTENTS JUNE 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 Leicester Square, 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 – JUNE 2020

Rainfall (mm) 2020 2019 600K 16 YEAR ON YEAR FOOTFALL -85% Footfall in the current month compared 14 500K to the same month last year 12 400K 10 MONTH ON MONTH FOOTFALL 300K 8 +61% Footfall in the current month compared

Footfall to the previous month

6 (mm) Rainfall 200K 4 100K 2 YEAR TO DATE FOOTFALL -55% 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 M T W T F S S

1 2 3 4 5 6 7 8 9 101112131415161718192021222324252627282930 1 2 3 4 5 Week 23 Week 24 Week 25 Week 26 Week 27

June trend summary

• Like-for-like footfall in the Heart of London area was down 85% in June 2020 compared to the same month last year • Over 2 million visits were registered in the June reporting period, which stretched from Monday, 1st June to Sunday, 5th July • This period covered both the date of the reopening of non-essential retail in the UK on 15th June, as well as the reopening of leisure and hospitality premises on 4th July • Retail reopening had a limited impact on footfall within the leisure- and office-oriented Heart of London area, as footfall was down 84% in the week starting 15th June • Footfall trends started improving at the very end of the month, when pubs, bars, restaurants and some other hospitality venues were allowed to reopen • The so-called “Super Saturday” on the 4th July was the busiest day of the month with ca. 120K visits, while Wednesday, 10th June, was the quietest with just ca. 33K visits • Month on month, footfall in the Heart of London area continues growing, +61% in June, although footfall is still well below last year’s pre-COVID-19 levels 3 FOOTFALL TRENDS HEART OF LONDON JUNE 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: -57% 12M New Coventry St. 10M YoY: -87% 8M YTD: -55% 6M 4M YoY: -84% 2M Shaftesbury Ave K Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec YTD: -51% YTD: -62% Fig1. Three year comparative footfall totals for Heart of London area. YoY: -82% YoY: -89%

Piccadilly North Irving Street YTD: -59% YTD: -49%

YoY: -86% YoY: -82%

Piccadilly South YTD: -56% Regent St. St James’s YoY: -84% YTD: -42%

YoY: -74%

Jermyn Street YTD: -55%

YoY: -78%

5 PICCADILLY & ST. JAMES’S JUNE HOURLY PROFILE

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

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

• Average hourly footfall fell by 80% 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 June. This was equally Weekday Weekend distributed between weekdays (-81%) and weekends (-79%). Source: Heart of London footfall counters, Piccadilly & St James’s only. • Sundays and Mondays were least affected (-77%), while the mid-week period (Wed-Fri) was down 82% year on year.

• Daily footfall peaked around mid-day (12:00-1:00 PM) at around 5.6K visits per hour, dropping off at 7:00 PM to 3.3K. LEICESTER SQUARE & PICCADILLY CIRCUS JUNE HOURLY PROFILE

• Average hourly footfall on the weekends was 64% lower than 120K on weekdays in the Piccadilly & St James’s area. 100K

80K Leicester Square & Piccadilly Circus footfall profile 60K • In the Leicester Square & Piccadilly Circus area, average 40K

hourly footfall also fell by 85% year on year (weekdays: -86%; ourly footfall volume 20K

weekends: -84%). K Total h

• Daily footfall peaked at 4:00 PM around 23K visits per hour, 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 but dropping sharply to 15K at 7:00 PM and 10K at 8:00 PM. Weekday Weekend

Source: Heart of London counters, Leicester Square and Piccadilly Circus only. • Average hourly footfall on the weekends was 45% 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 June footfall grew by 60.9% month on month from the low of 23 24 25 26 27 the national lockdown in May, but was still down 84.7% Heart of -90% -85% -84% -83% -82% compared to the more typical volume of visits a year ago. London

UK High -76% -73% -61% -59% -58% Nationally, high street footfall trends were recovering at a Street similar pace (+62.7% month on month), but in year on year West End -89% -88% -75% -74% -75% terms UK high street footfall was down just 64.4% in June.

NB: Reporting set includes all Heart of London counting locations (9) Week number This was due to the bigger impact of the COVID-19 lockdown on the Heart of London area and the rest of the West End.

LEICESTER SQUARE & PICCADILLY CIRCUS: YEAR ON YEAR At its lowest point, UK high street footfall was down 83%, while the Heart of London area was down as much as 94% in April.

Week Week Week Week Week 23 24 25 26 27 WEEKLY TRENDS LSQ -91% -86% -85% -84% -82% Weekly footfall trends continued recovering in June from the UK High • -76% -73% -61% -59% -58% Street lows of the national lockdown, although year on year statistics were still deeply negative. West End -89% -88% -75% -74% -75%

NB: Includes only Leicester Square & Piccadilly Circus locations (5) • Heart of London area started the month of June with footfall Week number down 90% year on year (Week 23), but visitation has started growing once again in Week 24 (+13% week on week).

PICCADILLY & ST JAMES’S: YEAR ON YEAR • Week on week growth continued throughout the month at a steady double-digit rate. Week Week Week Week Week 23 24 25 26 27 • In Week 25, non-essential retail reopened across the UK and PIC & ST J -82% -84% -81% -79% -79% footfall within the Heart of London area was boosted by 34% UK High week on week (-84% year on year). -76% -73% -61% -59% -58% Street In the final week of the month (Week 27), pubs, restaurants West End -89% -88% -75% -74% -75% • and bars were allowed to reopen across the area, boosting NB: Reporting set includes only Piccadilly & St. James’s locations (4) footfall a further 14% week on week (-82% year on year). Week number

7 HEART OF LONDON AREA FOOTFALL AND UK COVID-19 CASES COVID-19 AND FOOTFALL 3.0M 300K 2.5M 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. 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 COVID February March April May June • 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% 600% 34% from 2.6 million (week 8) to 2.2 million (week 10). 40% 13% 14% 500% 20% 400% • The biggest weekly declines occurred in weeks 11 (-64% 0% 15% week on week) and 12 (-75% week on week), ahead of -20% 300% -11% -40% the lockdown announcement on 23rd March. 200% -60% 100% 19 cases (WoW %)

-80% 3% 2% 1% - • 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 2020 Footfall 2020 Footfall (WoW %) just over 1 million in March. February March April May June 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 footfall has grown back to 255K in May and to 410K in June. 8 PROPERTY & INVESTMENT INVESTMENT – Q2 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 the second quarter of the year, with just over £17 million exchanging hands. The Crown Estate Mactaggart Family & Partners • This is down from £862 million in property sales in Q1, Sharps Pixley when Ellerman Investments sold the iconic Ritz Hotel on Piccadilly for £739 million to a Qatari investor. MCL Financial Group • The sale of Ritz Hotel is the most significant property NB: Purchases within the Heart of London area only, period: last 12 months transaction in the Heart of London area since May 2018, when Reuben Brothers purchased the TOP SELLERS (THE HEART OF LONDON AREA) for an estimated £296 million. (£) Million • The two transactions in Q2 this year included the sale of a leasehold in Bennet House on 54 St James’s Street to its £0 £200 £400 £600 £800 current occupier, the and silver bullion house Sharps Ellerman Investments Pixley, as well as a sale of a mixed retail/office property on 79 to a Hong Kong-based investor. MassMutual The Blackstone Group • Overall, there has been over £1 billion in property John Lyon's Charity transactions over the past 12 months (June 2019 – June 2020), compared to just under £300 million in the 12 Amsprop Estates months before that (June 2018 – June 2019). Gold Group International • Average price has also increased in the same period, from NB: Sales for the Heart of London area only, period: last 12 months £1,354 per sq. ft two years ago to £1,680 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 4.2% at the end of June, an increase from 3.9% in Q1. 6% 4% Net Absorption has also turned negative, as over 15K 2% Vacancy Rate (%) sq. ft of office and retail space became vacant and 0% leasing activity decreased from 14 deals in Q1 to just 8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 in Q2. 2015 2016 2017 2018 2019 2020 • Average commercial rents remained stable at around RETAIL AND OFFICE RENTAL RATES £77.5 per sq. ft, a slight 1% increase from Q1 2020.

90 • Average rents are now 11% down from their 2018 peak, when they reached as high as £87 per sq. ft. 80

70 • Inventory of property space stayed largely flat in recent years, with only one building (12.8K sq. ft)

Rent (£/ft2) 60 added in Q4 2019, a 4-floor office space on Suffolk Street (Hobhouse). 50 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • There was one building still under construction as of 2015 2016 2017 2018 2019 2020 Q2 2020 (ca. 192K sq. ft), The Londoner hotel on Leicester Square. FLOORSPACE UNDER CONSTRUCTION • The 5-star hotel, owned by the Edwardian Group, was scheduled to be delivered earlier this year after 3 500K years of development, but the opening plans have 400K been interrupted by the COVID-19 pandemic. 300K 200K • The new “super boutique” venue with 350 rooms and 35 suites is currently planning to open its doors in 100K Floorspace Floorspace (ft2) early 2021. K 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 9 929 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 170-173 Piccadilly Office 3 006 33 730 3 500 96 HNG 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 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 14-16 Waterloo Pl Office 3 101 16 931 2 718 82 Gerald Eve

12 EVENTS & ACTIVITY EVENTS & ACTIVITY Events: June Date Area Impact Notes WEST END IMPACT CALENDAR Demonstrations & Protests: Protest against racial 7-Jun LSQ Medium Black Lives Matter inequality We want our members to be informed of all the important dates, events and activities that have taken place in the past Protest against racial Demonstrations & Protests: PSJ & inequality; significant month and may have impacted your 13-Jun High business. Black Lives Matter LSQ impact, footfall +103% week on week

Limited initial impact, COVID-19 Lockdown: footfall increases from Non-essential retail stores 15-Jun All Medium -85% year on year to reopen -84%

March from Portland Place to Demonstrations & Protests: 27-Jun LSQ Low via Haymarket to raise Pride March Impact key awareness of LGBT rights issues High: Significant impact, on footfall and/or trade – Significant impact on review. COVID-19 Lockdown: visitation, footfall Some leisure & hospitality 4-Jul All High increases from -83% Medium: Potential impact on footfall and/or trade venues reopen year on year to -77% – be aware.

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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