ABERDEEN SHEFFIELD BRISTOL EDINBURGH CARDIFF NEWCASTLE MANCHESTER OFFICELEEDS MARKET

OCCUPIER HEADLINES TAKE-UP GRADE A SUPPLY PRIME RENT (sq ft) (sq ft) (£ per sq ft) • In 2018, leasing activity increased by 44% year on £34.00 £36.00 Year End 2018 1,750,562 Year End 2018 209,816 year, with office take-up reaching 1.7m sq ft by year end. This is not only 52% above the 10-year 2018 vs 10 year average +52% 2018 vs 10 year average -39% average, but also represents the highest total on record for the city. 306,456 306,456 1,750,562 • The rising concentration of occupiers from a 1,750,562 Year end 2018 Forecast 2019 290,000 290,000 290,000 290,000 technology background continued to underpin DEVELOPMENT PIPELINE (sq ft) take-up. TMT occupiers accounted for 38% 800,219 1,352,677 1,352,677 1,318,285 1,318,285 1,310,792 take-up in the city centre in 2018. 1,310,792 211,142 211,142 220,000 220,000 736,840 209,816 209,816 1,218,892 1,218,892 • Headline deals in 2018 include Amazon taking 89,500 sq ft at Hanover House and the 225,000 859,809 859,809 sq ft pre-let taken by Booking.com at Allied 0 306,456 306,456      1,750,562 ’s Enterprise City tech campus. 1,750,562 290,000 290,000 290,000 290,000 669,840 650,219 0 Speculative • The level of grade A availability in the city centre fell Dates indicate the potential completion date to just 209,816 sq ft by year-end. This total is 39% of schemes under construction as at Q4 2018 1,352,677 20132013 20142014 1,352,677 20152015 20162016 20172017 20182018 1,318,285 1,318,285 1,310,792 1,310,792 Development schemes are inclusive of both 211,142 211,142 220,000 220,000 209,816 below the long term average. 20132013 20142014 20152015 20162016 20172017 20182018 20132013 20142014 20152015 20162016 20172017 20182018 209,816 new and comprehensive refurbishment. 1,218,892 1,218,892 859,809 859,809

INVESTMENT HEADLINES 5.75% 5.75% £1081m £1081m 5.25% 5.25%

INVESTMENT 5.25% 5.25% PURCHASERS £ £989m £989m PRIME YIELD (last 12 months)

(NIY) 5.00% 5.00%

(£) 5.00% 5.00%

VOLUMES £917m £917m 20132013 20142014 2015201520162016 20172017 20182018 4.75% 4.75% 3% • Office investment volumes reached £989m in 2018, 20132013 20142014 20152015 20162016 20172017 20182018 20132013 20142014 20152015 20162016 20172017 20182018 % Year End 2018 £989m Year End 2018 4.75% 7% 10 the highest of any of the regional cities and 81% 7% ahead of the 10-year average for the city. 2018 vs 10 year average +81% Forecast 2019 4.75% £642m £642m £619m £619m • Two major funding deals were announced during 2018. Aviva Investors confirmed its commitment 5.75% 5.75% £1081m to a £300m deal supporting ’s £1081m 5.25% 5.25% 5.25% 5.25% £989m £989m

£331m £331m % % 5.00% 5.00% 5.00% 5.00% 90

Enterprise City. and L&G also launched £917m £917m 83 4.75% 4.75% a partnership to create Bruntwood Scitech. The UK Overseas Private £360m deal is to grow property assets from VENDORS (last 12 months) 1.3m sq ft to over 6.2m sq ft over the decade. 20132013 20142014 20152015 20162016 20172017 20182018 20132013 20142014 20152015 20162016 20172017 %20182018

£642m 3 £642m £619m £619m % • Aside, M&G Real Estate sold 3 Hardman Square to 7% 10 7% Royal London Asset Management for £107m, which is 17% higher than the price paid in 2015. Tristan £331m Capital Partners agreed to fund the development of £331m Salford City Council’s 100 Embankment for £65m.

% % 20132013 20142014 20152015 20162016 20172017 20182018 20132013 20142014 20152015 201620169020172017 20182018 83

While 2019 is unlikely to witness the increasing maturity and diversity of the city record levels of demand in 2018 we are centre occupier together with the limited expecting another strong year of above exposure to Banking and Finance should VIEW average take up. limit its impact. Take up will continue to be driven by occupiers from a technology or creative background and boosted by significant demand from co-working operators. 2019 should also see a new record headline rent set in the city centre as a number of grade A developments including 125 Deansgate and Landmark complete.

David Porter To date, the uncertainty over Brexit has Partner failed to dampen demand and the