ABERDEEN BRISTOL BIRMINGHAM OFFICEEDINBURGH MARKETNEWCASTLE

OCCUPIER HEADLINES TAKE-UP* AVAILABILITY PRIME RENT • Leasing activity improved in Q2 2019 with (sq ft) (sq ft) (£ per sq ft) take-up reaching 320,595 sq ft, a 65% increase £34.50 £35.00 Q2 2019 320,469 Q2 2019 125,000 compared to last quarter. This is 74% above the 10 year quarterly average and is the highest level Q2 2019 vs 10 year Q2 2019 vs 10 year of take-up for Birmingham since Q4 2017. quarterly average 81% quarterly average -68% • The occupational market has been dominated by the arrival of WeWork who has leased 229,042 Q2 2019 Year end 2019

sq ft at three different office locations located 320,595 320,595

220,000 DEVELOPMENT PIPELINE in 55 , Louisa Ryland House and 220,000

277,790 (sq ft) 6 . With the serviced office sector 277,790 791,000 190,000 growing, B2B accounted for 72% of take-up in Q2. 190,000 486,480 153,000 • Grade A supply continues to fall with 125,000 sq 153,000 194,014 194,014 ft being marketed across three buildings (No 1. 225,000 169,929 169,929 125,000 125,000 120,000 120,000 158,935 Colmore Square, House and 1 Newhall 158,935 0 0 Street) at the end of Q2. This is 68% below the 10      Speculative 320,595 year quarterly average. Taking into consideration 320,595 Dates indicate the potential completion date 220,000 220,000 requirements, the market has only four months of of schemes under construction as at Q2 2019. 277,790 277,790 Grade A accommodation remaining. It is expected Development schemes are inclusive of both 190,000 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2018 Q3 2018 Q4 2018 Q1 2019190,000 Q2 2019 that by the end of 2019, Two , Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 new and comprehensive refurbishment. 153,000 3 and Platform 21 would have completed. 153,000 194,014 194,014 169,929 169,929 125,000 125,000 120,000 120,000 158,935 158,935 INVESTMENT HEADLINES INVESTMENT £ PRIME YIELD PURCHASERS

4.75% 4.75% 4.75% 4.75% 4.75% • Office investment volumes significantly increased VOLUMES (£) (NIY) 4.75% 4.75% 4.75% 4.75% 4.75% (last 12 months) % £186.70m 3 £186.70m in Q2 2019, totalling £186.70m, the highest total Q2Q2 20192018 Q3 2018 Q4 2018 Q1 2019£186.70mQ2 2019 Q2Q2 2019 2018 Q3 2018 Q4 2018 Q1 20194.75%Q2 2019 % 4% for a quarter since Q1 2017. This is 87% above the 12 30% Rolling 12 month average £453.95m Forecast 2019 4.75% % %

10 year quarterly average. £146.75m 47

£146.75m 41 • This was supported by the standout deal of Q2 for 66% Birmingham which saw Gulf Islamic Investments acquire Priory Court and The Lewis Building 4.75% 4.75% 4.75% 4.75% 4.75% for £149m. This marks the largest UK office 4.75% 4.75% 4.75% 4.75% 4.75% £186.70m £186.70m £71.25m acquisition outside for the UAE investor, £71.25m £51m

£51m UK Overseas Private this year. The multi-let office is strategically £49.25m located in Birmingham’s business district. Tenants £49.25m VENDORS £146.75m £146.75m (last 12 3months)% include Spaces and the Ministry of Justice. Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 % 12% 4 • The sale of 11, Brindleyplace to Blue Nobel for % % 30 £37.7m provides further evidence of overseas 41% 47 investors benefitting from market uncertainty in % £71.25m £71.25m 66 £51m acquiring stock ahead of their UK competitors. £51m £49.25m • Overseas investment accounted for 41% of total £49.25m investment volumes over the past 12 months. Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019

KEY TRANSACTIONS

6, BRINDLEYPLACE LOUISA RYLAND HOUSE, PRIORY COURT & THE LEWIS 11, BRINDLEYPLACE NEWHALL STREET BUILDING TENANT: WeWork TENANT: WeWork PURCHASER: Gulf Islamic Investments PURCHASER: Blue Noble LLP TERM: Confidential TERM: Confidential VENDOR: Legal & General Property VENDOR: Benson Elliot Capital SIZE: 92,670 sq ft SIZE: 81,280 sq ft PURCHASE PRICE: £149m PURCHASE PRICE: £37.7m RENT: Confidential RENT: Confidential YIELD: N/A YIELD: N/A DATE: Q2 2019 DATE: Q2 2019 DATE: Q2 2019 DATE: Q2 2019 KEY CONTACTS

Office Head Investment Markets Ashley Hudson Ben Wisher Partner Associate +44 121 233 6443 +44 121 233 6456 [email protected] [email protected]

Occupier Markets Research Jamie Phillips Darren Mansfield Partner Associate +44 121 233 6403 +44 20 7861 1246 [email protected] [email protected]

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