8/8/2019 The state of play, property another year on - LSH seminar slides

1/22

CAPITALISING ON CURRENTMARKET CONDITIONS

Guy GilfillanHead of LSH Yorkshire

8/8/2019 The state of play, property another year on - LSH seminar slides

2/22

8/8/2019 The state of play, property another year on - LSH seminar slides

3/22

8/8/2019 The state of play, property another year on - LSH seminar slides

4/22

POSITIVE DEVELOPMENTS

RETAIL INDUSTRIAL OFFICE

350m 5m sq ft Largest

northern officedeal 2010?

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5/22

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6/22

MARKET OPPORTUNITIES

Retail: Convenience sector

Healthcare: Residential / healthcareprovision for the elderly

Education: Private schools Public sector: Relocation for efficiency

gains

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7/22

CURRENT CONDITIONS

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8/22

MARKET OPPORTUNITIES

Sectoral changes

Supply

Innovation

Environment

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9/22

THE OFFICE MARKET

8/8/2019 The state of play, property another year on - LSH seminar slides

10/22

THE OFFICE MARKET

City Centre Office Take-up

472,586

585,844

513,773

731,419

539,113

337,694

563,785

621,405

570,208

499,502

592,639

471,199

246,443

270,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Year

ft2

Average take-up: 519,000 ft2

8/8/2019 The state of play, property another year on - LSH seminar slides

11/22

THE OFFICE MARKET

OPPORTUNITIESShift to core CBD:

Across the UK

Drivers staff & transport

75% of current enquiries Location, location, location

8/8/2019 The state of play, property another year on - LSH seminar slides

12/22

THE OFFICE MARKET

OPPORTUNITIESDemand for quality:

Previously cheap n cheerful

2010 quality & good value

80% of enquiries Grade A/B+

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13/22

THE OFFICE MARKET

OPPORTUNITIESLack of stock:

No new build

Quality of the stock

Core CBD availability< 2.5 yrs supply

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14/22

THE OFFICE MARKET

OPPORTUNITIESLease events:

850,000 sq ft (2010 2015)

5 x 80,000 sq ft+ (2014)

Downsizing Will tenants move?

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15/22

THE INDUSTRIAL MARKET

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16/22

THE INDUSTRIAL MARKET

OPPORTUNITIESRecent take-up:

5m sq ft take-up last 2 years 2 years supply remaining

Less in reality

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17/22

THE INDUSTRIAL MARKET

OPPORTUNITIESOnline retailing:

Major distribution driver Recently ASOS, Amazon, Next

Directory, Asda & Ocado Number of major online retailer-led

requirements

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18/22

THE INDUSTRIAL MARKET

OPPORTUNITIESManufacturing:

Expert-led economy 10% of regional economy

Rolls-Royce & Forgemasters

Innovation:

Universities

Waste to energy

Energy

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19/22

THE INVESTMENT MARKET

OPPORTUNITIES First transaction yield

increase for 18 months

Transaction levels slow inQ3 still highest for 2years

Focused on CentralLondon Office Market /prime assets

Secondary / tertiarymarkets soft

2001 2002

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20/22

THE INVESTMENT MARKET

OPPORTUNITIES Institutions are the

most active buyers Overseas investment

pattern less

predictable

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21/22

OPPORTUNITIES QUASHED

Lack of finance

Shortage of available sites & premises Lack of economic growth

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22/22

CONCLUSION

Most high-profile property

entrepreneurs created the opportunityin a bad market & capitalised on itlater in the cycle.

When the market turns, it will improvemuch more quickly thancommentators expect.