THE RACE FOR SPACE

16 CUSHMAN & WAKEFIELD 17 RACE FOR SPACE TOWER ANALYSIS Pre-letting is historically a City- centric phenomenon in Central London, and towers form a significant part of the City market. There is a perception that towers are built with pre-letting as the main focus, however this is often not the case. Whilst some tower developments require an off-plan pre-let to kickstart the scheme, our analysis shows that generally this is not the case. In fact, some landlords that we interviewed suggested that in order to ‘re-create’ an area, they would prefer to deliver space speculatively. Tower pre-let analysis Size of lettings Larger floorplates are more likely to be pre-let in tower buildings. Of all tower pre-lets signed between 2009 and 2018, 65% had an average floorplate size greater than 17,500 sq ft. These floorplates tend to be situated on the lower parts of the building as landlords look to lease the larger floors first. Diversity of occupier profile Banking & financial occupiers took the largest share of tower pre-lets over the last 10 years with 32% of total volumes, mirrored by insurance companies (32%). Amenity profile Important to manage/segregate public accessed space. Source: Cushman & Wakefield THE LEADENHALL BUILDING, EC3 Completed 2014 31% Pre-let off-plan 18% Pre-let during construction 49% PRE-LET TOTAL 20 FENCHURCH STREET, EC3 Completed 2014 0% Pre-let off-plan 80% Pre-let during construction 80% PRE-LET TOTAL 100 BISHOPSGATE, EC2 Completing in 2019 30% Pre-let off-plan 49% Pre-let during construction 79% PRE-LET TOTAL 110 BISHOPSGATE, EC2 Completed 2011 0% Pre-let off-plan 13% Pre-let during construction 13% PRE-LET TOTAL THE SCAPEL, 52 LIME STREET, EC3 Completed 2018 21% Pre-let off-plan 14% Pre-let during construction 35% PRE-LET TOTAL 70 ST MARY AXE, EC3 Completing in 2019 0% Pre-let off-plan 30% Pre-let during construction 30% PRE-LET TOTAL 22 BISHOPSGATE, EC2 Completing in 2019 0% Pre-let off-plan 14% Pre-let during construction 14% PRE-LET TOTAL Towers don’t generally achieve an off-plan pre-let. Most towers are let during construction or post completion. Of the towers analysed, 17% of lettings were pre- let off-plan and 29% let during the construction process, compared to 54% let post completion. The diversity of the amenity offer is becoming increasingly important to occupiers. Also of importance is to manage or segregate public accessed space within the building. The leasing velocity is enhanced the larger the floorplate. 53% of all tower pre-lets by number since 2009 have had floorplates larger than 20,000 sq ft, the majority of which are located on lower floors. SO WHAT? Figure 11 Tower pre-lets by type (by number) 2009-2018 29 UNDER CONSTRUCTION 5 OFF PLAN Source: Cushman & Wakefield