portfolios & alternatives drive a record q1, but have...

Investment Review Q1 2015

1

Portfolios & alternatives drive a record Q1, but have yields reached a floor?

UK Commercial Property Investment Review Q1 2015

Sponsored by

CoStar Group

2

Table of Contents

Every effort has been made to ensure the accuracy of the information held within this report. The publisher cannot accept liability for any loss/damage which may arise as a result of any error or omission of any data. Any data reproduced from this analysis must be accredited to CoStar.

Overview ....................................................................... 3

Major Events .................................................................. 4

Key Transactions ............................................................. 5

Highlights from CoStar Data ........................................... 6

Mixed Results After Q4 Boom .......................................... 7

Investors Look Westward in Q1 ........................................ 8

Americans Still Lead the Way .......................................... 9

Investors Look Beyond Traditional Assets .......................... 10

The End of Yield Compression? ............................................12

Will Strong Performance Wind Down? .................................13

League Tables: Investment Agents .................................... 14

League Tables: Single Branch Agents ............................... 15

How Did CoStar Get to £16.8bn? ..................................... 16

Data, Analytics and News Have Come Together .............. 17


3

Key Figures

£16.8bninvested in UK commercial properties in Q1 2015

from Q1 2014

£7.3bn

7.34%

of foreign investment

average all property yield

22%poured into hotels and student accommodation,

of all investment

a record high

£828mof office investment in the ‘Big Six’ regional cities, the second-strongest quarter since the crisis

a rise of 19bps Q-o-Q

a 27% increase from Q1 2014

Overview

Soaring demand for UK CRE continued in Q1 2015. Investment of £16.8bn across 850 deals marked a nine-year first quarter high and a 12% increase from Q1 2014. Although seasonal factors meant a 29% drop from the record £23.6bn invested in Q4 2014, the momentum continues, with property still proving very attractive to investors on a relative value basis. Indeed, as the first quarter is traditionally the quietest one of the year, 2015 could even go on to eclipse 2014’s all-time high.

There were several standout themes in the quarter, with the rise of multi-region portfolios prominent among them. A record £5.9bn poured into this type of deal in Q1, double Q1 2014’s figure and well above the five-year quarterly average of £2.2bn. The seven largest deals were all portfolios, as vendors looked to capitalise on competitive pricing, and buyers – mainly from the US – sought to invest large chunks of capital all at once in the hope of outsized returns.

Rising demand for so-called ‘alternative’ assets was another key theme in Q1, with investors increasingly willing to embrace sectors outside of the traditional big three of office, retail and industrial. A record £2.2bn was spent on student accommodation during the quarter, more than five times the five-year average, while hotel investment doubled Y-o-Y to hit a quarterly high.

The final mention must go to yields. Although pricing remains highly competitive in London, average yields outside the capital decompressed in all sectors in Q1. Reasons include a dwindling pool of available prime assets – following 2014’s glut of deals – and an increasing appetite for risk. But this may also reflect some of the heat coming out of the market ahead of the general election and pricing perhaps getting ahead of fundamentals. Next quarter’s results will determine if this is a trend or an anomaly.

up 12%

CoStar Group

4

Major Events

Inve

stm

ent

January February March

Leas

ing

&D

evel

opm

ent

Econ

omic

Sent

imen

t

+

- 9498

102106

118122126130

110114

90

££ ££ ££

UK unemployment rate falls to 5.6%, the lowest level since July 2008. CPI inflation rate drops to

0%, the lowest since estimates began in 1988.

UK Sentiment Eurozone Sentiment 100 = Long term average

113.9

101.5

113.8

111.1

102.3 103.9

Economic Sentiment Source: European Commission

Demand for Manchester assets continues as M&G Real Estate acquires 3 Hardman Square for £91.7m at a 5.79% yield.

St Ermin's Hotel in Westminster is sold to US-based investor Sunrider International for £185m, almost triple the price paid by an Angelo Gordon & Co. consortium in 2010. Mixed-use Project Laser

portfolio is sold by Moorfield to Lone Star for £1bn.

China's Gingko Tree buys a 50% stake in the Bentall Shopping Centre in Kingston upon Thames for £190m, £60m more than vendor Meyer Bergman paid for the stake in 2010.

Birmingham City Council puts 450,000 SF Grand Central Shopping Centre on the market for £250m.

CPPIB buys Liberty Living portfolio for £1.1bn in a strong quarter for student accommodation investment.

New York-based WeWork launches 500,000 SF London office search as demand from serviced office providers heats up.

Hermes Real Estate announces plans for a 122,000 SF office development in Edinburgh. If approved, office stock in Edinburgh is set to increase by over 1m SF in the next three years.

Deutsche Bank announces plans to relocate a large proportion of its London offices, instructing agents to look for 400,000 SF outside the City. HSBC also announces intentions to relocate its UK personal and business bank from London to Birmingham.

Battersea Power Station offices, totalling 1.25m SF, are brought to market.

Deloitte pre-lets entire 275,000 SF 1 New Street Square in London Midtown in the largest office deal of the quarter.

Retailer Dunelm leases a 525,000 SF shed in Stoke-on-Trent in one of Q1's biggest industrial lettings.

Real wage growth rises at its fastest rate in five years, with average earnings (including bonuses) up 2.1% Y-o-Y.

UK GDP growth slowed to 0.3% in Q1, the weakest growth posted since Q4 2012.

ECB begins its long-awaited €1.1tn Quantitative Easing programme and upgrades its growth forecast for 2015.


5

Key Transactions in Q1 2015

Price: c. £1.1bnSize: 16,700 roomsSector: Student AccommodationPurchaser: CPPIBVendor: Brandeaux Student Acc. Fund

Price: £733m (£381m/£352m) Sector: RetailPurchaser: British Land/TescoVendor: Tesco/British LandInitial Yield: 5.20%, 4.80%

Price: £251.5m (50%)Size (sq ft): c. 1,600,000Sector: Mixed (Office-led)Purchaser: Legal & General Capital Vendor: Peel GroupInitial Yield: 5.67%

Price: c. £1bnSize (sq ft): c. 2,000,000Sector: MixedPurchaser: Lone Star Real Estate Fund III Vendor: Moorfield Group

Price: £370mSize (sq ft): c. 1,500,000Sector: MixedPurchaser: Legal & General CapitalVendor: Bishopsgate Long Term Property Fund Unit Trust Initial Yield: 6.00%

Price: £250mSize (sq ft): 907,676Sector: RetailPurchaser: Orion Capital Managers Vendor: Ares ManagementInitial Yield: 6.50%

Price: £680mSize: 7,300 roomsSector: HotelPurchaser: Lone Star FundsVendor: Various Shareholders of Jurys InnInitial Yield: 6.43%

Price: £300mSize (sq ft): 1,003,382Sector: OfficePurchaser: AXA-led consortiumVendor: Wafra, SEDCO Capital and Arab Investments Ltd

Price: £190m (50%)Size (sq ft): 669,259Sector: RetailPurchaser: Gingko TreeVendor: Meyer BergmanInitial Yield: 4.40%

Liberty Living Portfolio

Tesco/British Land Swap

MediaCityUK, Salford

Project Laser

Bishopsgate Unit Trust

Telford Shopping Centre, Telford

Jurys Inn Portfolio

22 Bishopsgate, London EC2

The Bentall Centre, Kingston upon Thames

CoStar Group

6

Highlights from CoStar Data

• £16.8bn invested in UK commercial property in Q1 2015, up 12% from Q1 2014 and 64% from Q1 2013.

• Multi-region portfolio trades totalled a record £5.9bn, double Q1 2014’s figure. Foreign capital was behind 72% of this investment, up from 38% a year earlier.

• Excluding portfolios, investment was split relatively evenly between London and the rest of the UK, with £5.6bn and £5.3bn of investment respectively.

• Investment in the three main CRE sectors – office, retail and industrial – accounted for a quarterly low of 63% of Q1’s total, as other sectors, especially student accommodation and hotels, came to the fore.

• Shopping centre investment dropped sharply to £833m in 18 deals, the weakest quarter since Q2 2013.

• The all property average yield rose by 19bps to 7.34%, although yields remain 46bps lower than where they were a year ago.

Chart 1: UK Quarterly Investment Volume (£bn)Chart 1: UK Quarterly Investment Volume (£bn)

0

10

20

30

40

50

60

70

80

2009 2010 2011 2012 2013 2014 2015

Q1 Q2 Q3 Q4Source: CoStar GroupSource: CoStar Group


7

Mixed Results After Q4 Boom

Chart 3: Q1 2015 UK Investment by Sector

35%

21%7%

37%

IndustrialO�ce Retail Mixed/Other

Source: CoStar Group

Retail investment dipped to £3.6bn in Q1, but its share of total investment rose to 21% from 17% in Q4. Retail warehouses were especially popular, with investment up 45% Q-o-Q to £793m. Supermarkets also saw a resurgence in investment with £505m traded, up 59% Q-o-Q and 43% Y-o-Y, driven by transactions between Morrison’s and Tesco and UK institutions. Meanwhile, in a hangover from surging investment in 2014, shopping centre investment plummeted to £833m, the weakest quarter since Q3 2013.

Reta

il

After a £11.4bn spending frenzy in Q4, investment in offices was more subdued in Q1 at £5.9bn, equal to 35% of overall volume and below the five-year average of 43%. London again accounted for the majority (68%) of office investment, though this is down from 78% in Q4. ‘Big Six’ offices had their second strongest quarter since the downturn with £828m invested, led by the £251m sale of a 50% stake in Salford’s MediaCityUK to Legal & General.

Offi

ceIn

dust

rial

Chart 2: UK Quarterly Investment by Sector (£bn) Chart 3: Q1 2015 UK Investment by Sector

Office Retail Industrial Mixed/Other


Office Retail Industrial Mixed/Other


Chart 2: UK Quarterly Investment by Sector (£bn)

0

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10

15

20

25

Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15

O�ce Retail Industrial Mixed/OtherSource: CoStar Group

For the seventh quarter in a row, industrial investment breached £1bn with a total of £1.1bn transacted in Q1. However, this marked a 65% drop from a stellar Q4 and a 21% fall Y-o-Y. Sales in the sector are still being driven by US and UK funds hunting portfolio deals, such as the Marble Portfolio, acquired by Goldman Sachs from Nationwide Building Society for £107.2m.

CoStar Group

8

Investors Look Westward in Q1

Chart 4: Q1 2015 Investment Volume by Region(Total Value & Breakdown by Sector)

`

41%

33%

15%

11%

52%36%

4%8%

42%26%

21%11%

66%14%0%

20%

61%17%

7%15%

7%37%

37%

19%

16%

28%44%

12%

17%

52%4%

27%

8%

46%33%

13%

34%

40%

20%

6%

21%

56%

9%14%

£766mNorth West

£5,601mLondon

£1,437mSouth East

£443mScotland

£971mWest Midlands

£57mWales

£400mSouth West

£177mNorth East

£217mEast Midlands

£252mYorkshire & H.

£417mEast of England

28%

-28%45%

-23%

0%g

000000000000000000000%%%%%%%%%%%%%%%%%%%%

24%

108%

-4%

-41%

7%

50%

Investors looked to the west for opportunities in Q1, with investment in the North West and the South West experiencing 65% and 91% Y-o-Y uplifts to £766m and £400m respectively.

Driven by retail trades, investment in the West Midlands also received a boost, increasing to £971m, double the region’s five-year average.

Constrained by a lack of supply, investment in London posted its weakest quarter in two years, falling 44% Q-o-Q

Chart 4: Q1 2015 Investment Volume by Region(Total Value & Breakdown by Sector)

Chart 5: Quarterly Investment Volume (£bn)

London & South East Other Regions Multi-Region Portfolio % Other Regions

Office

Retail

Industrial

Mixed/Other


Chart 5: Quarterly Investment Volume (£bn)

0%10%20%30%40%50%60%

0

5

10

15

20

25

Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15

London & South East Other Regions Multi-Region Portfolio % Other RegionsSource: CoStar GroupSource: CoStar Group

Percentages indicate % above/below 5-year average

to £5.6bn.

Investment outside London (excluding multi-region portfolios, which had a record quarter) totalled

£5.3bn, the weakest quarter since Q3 2013, with only office investment up on a Y-o-Y basis.


9

Americans Still Lead the Way

Chart 8: Q1 2015 UK excl. London Investment by Purchaser Region


UK

N America

W Europe

Asia

Rest of World

91%

3% 5%1%

Chart 7: Q1 2015 London Investment by Purchaser Region


UK

N America

W Europe

Asia

Rest of World

46%

23%

10%

21%

Chart 6: Q1 2015 UK Investment by Purchaser Region


52%

32%

9%7%

UK

N America

W Europe

Asia

Rest of World

Foreign investment across the UK totalled £7.3bn in Q1, 48% of the total. Although this is down from a record £10.3bn (50% share) in Q4 2014, Q1 marked the third strongest quarter on record in terms of volume and the second highest quarter as a share of total investment.

Continuing the theme from Q4, American investors were highly acquisitive, accounting for 21% of all investment including the top three deals of the quarter. In the last six years, no foreign country has accounted for a greater share of quarterly investment. US investment in Q1 totalled £3.6bn, just shy of the record £4bn invested in Q4. The majority (68%) of US capital was invested in portfolios, including Lone Star’s £1bn Project Laser and the £680m Jurys Inn Portfolio.

For the first time in four years, net investment in London from North America was greater than that from Asia, as firms such as NorthStar, Blackstone, and Starwood pushed North America’s purchases in the capital to £1.2bn. Overall, foreign investment fell in London to £2.7bn, the lowest in seven quarters, representing 54% of London investment, down from 60% in 2014.

Outside London, foreign investment was concentrated in multi-region portfolios. Excluding these portfolios, overseas buyers accounted for just 9% of investment, but the share rises to 44% when multi-region portfolios are taken into account. Q1 was a record quarter for foreign investment in portfolios, totalling £4.2bn.

Top Foreign Investor by Country in Q1 2015

Country Investment (£m)

1 USA 3,564

2 Canada 1,345

3 China 388 4 France 249 5 Netherlands 219 6 Singapore 216

7 Norway 191

UK

N. America

W. Europe

Asia

Rest of World


UK

N. America

W. Europe

Asia

Rest of World


UK

N. America

W. Europe

Asia

Rest of World


Chart 6: Q1 2015 UK Investment by Purchaser Region

Chart 7: Q1 2015 London Investment by Purchaser Region

Chart 8: Q1 2015 UK excl. London Investment by Purchaser Region

Note: Figures in charts 7&8 exclude multi-region portfolios

CoStar Group

10

Investors Looks Beyond Traditional Assets

One of the standout trends from Q1 was the popularity of asset classes beyond the traditional office, retail, and industrial staples. Whilst alternative and other sectors like hotels and student accommodation have been quietly gaining in popularity for the past couple of quarters, they took centre stage in Q1.

The hotel sector posted a record quarter with £1.5bn invested over 39 deals. Hotels emerged strongly in H2 2014 after a quiet start to last year, with post-crisis record highs achieved over the past three quarters.

Propelled by the London 2012 Olympics, the tourism industry has been one of the UK’s strongest performers since the recession. The ONS estimates that tourism accounted for one-third of jobs created from 2010-2013, and inbound overseas tourism to the UK posted a record

34.8 million visits in 2014, up by 5 million, or 6%, in 2013. Another recent development is the growing ease with which Chinese and East Asians can apply for tourism visas. Increased openness to this region should provide a steady source of inbound visits to the UK over the coming years.

The increasing attractiveness of portfolio deals was also a major factor behind the recent surge in hotel volume. Since the start of 2014, half of the 12 hotel deals that closed at £100m or greater were portfolio trades. The largest of these, Lone Star’s £680m purchase of the Jurys Inn Portfolio, closed in Q1. As this trade illustrates, foreign investors have been particularly attracted to the hotel sector, accounting for 25% of hotel purchases since the start of 2014, up from an average of 11% from 2009-13.

Chart 9: UK Hotel & Student Acc. Investment by QuarterChart 9: UK Hotel & Student Acc. Investment by Quarter

0%

5%

10%

15%

20%

25%

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

Q1 09 Q3 09 Q1 10 Q3 10 Q1 11 Q3 11 Q1 12 Q3 12 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15

Student Accommodation Hotel Hotel + Student Accommodation Share of Total

Investment (£bn) Share of Total



11

Investors Looks Beyond Traditional Assets

Student accomodation deals have also been gaining momentum recently. In Q1 2015, nearly £2.2bn was invested in this alternative sector, a whopping 22% more than was invested in the whole of 2014. Since the start of 2014, there have been nine student accommodation deals over £100m, by far the largest of which – CPPIB’s £1.1bn acquisition of the Liberty Living brand portfolio, which comprised of more than 40 properties – closed in Q1.

The growing attraction to the sector is undoubtedly linked to burgeoning student numbers and a shortage of competitive stock. Full-time enrolment in UK higher education institutions peaked in 2011/12 with 1.7 million students before tuition hikes launched in 2012 resulted in slight declines. However, the student population is rising again, particularly from China and other non-EU countries.

From 2009/10 to 2013/14, full-time enrolment of non-domiciled students grew 14% to nearly 400,000, whilst the number of UK-domiciled students grew by 1% over the same period. The rise of foreign students has been a fresh source of demand for student housing owners, and with caps on student numbers set to be removed entirely in the 2015/16 school year, an additional 60,000 students are estimated to enter higher education annually in the coming years.

Together, student accommodation and hotel investment have accounted for a growing share of investment in the UK, peaking at 22% in Q1. The rise of these asset classes is providing a particular lift to regional investment, as neither industry is confined to the capital. In the past two years, 66% of hotel and 85% of student accommodation investment has been in single assets outside London or in multi-region portfolios.

49%

26%

25%

Portfolio London Ex London

Chart 14: UK Hotel and Student Acc. Investment by Region Since 2013


Chart 10: UK Hotel and Student Acc. Investment by Region Since 2013


EXCLUSIVE VIDEO INTERVIEW: M&G and Hines

Chris Perkins of M&G and Anthony Leonard of Hines share their views on Q1 emerging trends.

WATCH THE INTERVIEW HEREyoutube.com/CoStarUK

http://youtu.be/ZViOZYrwu90

CoStar Group

12

The End of Yield Compression?

Chart 11: Q1 2015 Initial Yield Histogram


1 2 3 4 5 6 7 8 9 10 11 12 13 140

102030405060708090

100 Number of Deals per Yield Bracket

O�ce Retail Industrial

Note: The hotter the colour the more frequent the transactions at that yield


• Yields moved out in all sectors in Q1 2015 following rapid compression during 2014.

• The average all property yield expanded by 19bps, to 7.34%, with the greatest decompression occurring in the industrial and office sectors, suggesting an over-correction took place during 2014.

• Nonetheless, industrial and office yields remain comfortably below where they were a year ago. Retail yields have been relatively static, reflecting ongoing concerns about the health of the sector.

• The yield gap between London and the rest of the UK widened sharply in Q1 2015, to 320 bps, reversing some of the convergence recorded during 2014.

• London office yields sank to a new post-crisis low of 4.50%, a drop of 10bps Q-o-Q, in contrast to the rest of the UK where average office yields rose for the second consecutive quarter.

Chart 11: Average Initial Yield by Sector (Unweighted) Chart 12: Average Yield in London vs. Rest of UK

Chart 13: Q1 2015 Initial Yield Histogram Chart 14: All Property Yield Heat Map

— All Property — Office — Retail — Industrial Source: CoStar Group

— Difference (basis points) — London — UK ex. London Source: CoStar Group

Office Retail Industrial


Chart 9: Average Initial Yield by Sector (Unweighted)


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All Property O�ce Retail Industrial

Initial Yield (%)

Chart 10: Average Yield in London vs. Rest of UK


050100150200250300350400

0123456789

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Q1 0

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Di�erence (basis points) London UK ex. London

Initial Yield (%) Basis Point Spread

Chart 12: All Property Yield Heat Map


03.54.55.56.57.58.59.510.511.512.5

Q1 0

8Q

3 08

Q1 0

9Q

3 09

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3 11

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Initial Yield (%)

Note: The hotter the colour the more frequent the transactions at that yield

Initial Yield (%)


13

Stellar investment into UK commercial property continued into the first quarter of 2015, but some indicators suggest that this strong performance may be starting to fade.

Despite the looming General Election, the nine-year first quarter investment high suggests the various permutations around wealth taxes and non-dom reforms (and so on) that are likely to emerge in the policy horse-trading after the vote are yet to have much impact on investment decisions.

Elsewhere, however, there are signs that the market is moving to the next phase of the cycle. As expected, the search to find value and an increased appetite for stock in riskier areas – given the relative scarcity of prime assets and the fierce competition from global and native capital – has been the most notable trend.

Increased investment in alternative assets and development opportunities is propping up the transactions out-performance, while landlords are understandably seeing this as the moment to crystallise exit strategies via multi-region and asset quality portfolio trades as well as corporate vehicle sales, most strikingly Qatari Diar and Brookfield’s acquisition of the Canary Wharf business which completed just outside of the first quarter.

And with distress no longer behind the majority of trades, one of the more compelling reasons to invest in real estate is fading in the UK.

The yield story for investors is also less of a factor generally. CoStar has now recorded two quarters of outward movement in average yields for all property, retail, industrial and rest of UK offices, the first time this has happened since the eurozone crisis in 2012.

It is too early to start calling the top of this cycle, but buyers are inevitably becoming more demanding of assets and more price sensitive, perhaps as they begin to build in expectations of interest rate rises, and these trends will only become more influential throughout the remainder of 2015.

Will Strong Performance Wind Down?Written by Paul Norman

Editor, CoStar News

Price: £250mSize (sq ft): 450,000Status On MarketVendor: Birmingham City Council & Network Rail

Price: c. £170mSize (sq ft): 345,000Status Under OfferVendor: Aberdeen Asset Management

Price: £320mSize (sq ft): 117,300Status Under OfferVendor: Secure Income REIT

Grand Central, Birmingham

Bedfont Lakes, Hounslow

Madame Tussauds, London

CoStar Group

14

League Tables: Investment Agents

Rank Q1 2015

(Q4 2014)

Vendor Agent Value £m

1 (2) CBRE 1,806 2 (1) JLL 1,700 3 (4) Savills 1,183 4 (5) Knight Frank 989 5 (15) Eastdil Secured 865 6 (7) Colliers International 600 7 (-) Morgan Williams 491 8 (12) Strutt & Parker 406 9 (10) GVA 397 10 (-) Tudor Toone 284 11 (8) DTZ 226 12 (-) Michael Elliott 160 13 (9) Cushman & Wakefield 138 14 (-) SG Commercial 131 15 (11) Allsop 126

Investment Agents - Vendor

Rank Q1 2015

(Q4 2014)

Acquisition Agent Value £m

1 (3) JLL 1,281 2 (-) Doherty Baines 1,005 3 (7) Knight Frank 948 4 (4) Savills 899 5 (1) CBRE 829 6 (8) Colliers International 660 7 (-) Morgan Williams 607 8 (5) Cushman & Wakefield 496 9 (9) DTZ 365 10 (11) BNP Paribas Real Estate UK 299 11 (-) Allsop 278 12 (2) Strutt & Parker 244 13 (-) Lambert Smith Hampton 177 14 (15) Tudor Toone 153 15 (6) GM Real Estate 142

Investment Agents - Acquisition

Source: CoStar Group Source: CoStar Group

It’s been another exceptional quarter of business for the UK’s agency giants with the likes of CBRE, JLL, Savills and Knight Frank all once again having standout periods for both sales and acquisitions advice. CBRE (1) and JLL (2) swapped places this quarter for sales completed, while JLL was top dog for acquisitions with

an impressive £1.28bn of buys advised on. JLL did the most deals combined at a whopping £2.981bn. Single branch agency Doherty Baines muscled in among the big boys to secure second spot acquisitions wise thanks in large part to its work advising Lone Star on its £1bn Project Laser buy.

To find out more about CoStar Propex visit www.costar.co.uk/products/propex

CoStar Group

100% of Q1 2015’s top 15 Acquisition agents* subscribe to Propex. 77% of Q1 2015’s top 15 Vendor agents* subscribe to Propex.

*Includes single and multi-branch agencies


15

League Tables: Single Branch Agents

Rank Q1 2015

(Q4 2014)

Vendor Agent Value £m

1 (3) Eastdil Secured 865 2 (8) Morgan Williams 491 3 (4) Tudor Toone 284 4 (6) Michael Elliott 160 5 (-) SG Commercial 131 6 (1) GM Real Estate 121 7 (7) Doherty Baines 111 8 (-) Cortex Partners 88 9 (-) HMC Surveyors Ltd 86 10 (-) Lunson Mitchenall 75 11 (-) Hartnell Taylor Cook 72 12 (-) Fawcett Mead 64 13 (11) Lewis & Partners 62 14 (15) Harvey Spack Field 50 15 (-) Griffiths Eccles 50

Single Branch Agents - Vendor

Rank Q1 2015

(Q4 2014)

Acquisition Agent Value £m

1 (7) Doherty Baines 1,005 2 (8) Morgan Williams 607 3 (5) Tudor Toone 153 4 (1) GM Real Estate 142 5 (12) Cortex Partners 134 6 (-) Fineman Ross 131 7 (-) Ereira Mendoza 124 8 (-) Harvey Spack Field 123 9 (-) Fawcett Mead 118 10 (6) Dowley Turner Real Estate 93 11 (-) Michael Elliott 84 12 (-) Edgerley Simpson Howe 82 13 (9) Hanover Green 66 14 (14) CWM 63 15 (-) Wilkinson Williams 62

Single Branch Agents - Acquisition

Source: CoStar Group Source: CoStar Group

Single agency wise there have again been some extraordinary performances this quarter. A special mention should go to Morgan Williams which came second in both the sales and acquisitions tables to chalk up £1.098bn of advisory work combined, with its help

advising British Land and Tesco on a £733m property swap the deciding factor. In addition, Doherty Baines, Eastdil Secured, Tudor Toone (third in both sales and acquisitions), Michael Elliott and SG Commercial will all be feeling very satisfied with their respective quarters.


Chris Perkins of M&G and Anthony Leonard of Hines share their views on Q1 emerging trends.

WATCH THE EXCLUSIVE INTERVIEW HEREyoutube.com/CoStarUK

VIEW THE Q1 RESULTS IN SUMMARY

http://youtu.be/ZViOZYrwu90

CoStar Group

16

How Did CoStar Get to £16.8bn?

We speak to:

8,315UK agents

This report is based on the analysis of 14,640 UK investment deals since 2009, the largest pool analysed by any information provider.

CoStar can achieve this level of comprehensiveness by employing the UK’s largest CRE research team. Over 120 qualified researchers regularly contact agents, investors and owners across the UK, making over 125,000 calls per year to verify the information.

Once verified, our data is available to clients via our flagship product CoStar Suite - providing access to building and deal information, market analytics and news.

Our quarterly investment analysis gives clients the most accurate picture of investment activity and the forces that drive supply and demand.

Our Methodology

818 multi

branch

3,066 single

branch

CoStar Group

(An estimated 97% of UK agencies

list with us)


17

Access a unique combination of Data, Analytics and News, offering the most comprehensive macro-to-micro explanation of the latest trends in the UK property market.

CoStar’s proprietary data, which underpins this report, is sourced directly from UK property agents, investors and other involved parties to accurately reflect the transactional market in real time.

Typically 850+ investment deals are recorded each quarter, more than any other data source. The Analytics team then overlays top-down analysis of the UK market on this unique dataset, breaking down investment trends by sector, sub-sector, geography, lot size, investor type, and yield.

Finally the News team adds perspective to the analysis by providing timely industry and market updates.

For more information on our methodology or the data in this report please contact one of the authors below

Iain Smyth Investment Research AssociateT: 014 1354 0629 E: [email protected]

Ola Dawodu Investment Research AssociateT: 014 1354 0683 E: [email protected]

Paul Norman Editor, CoStar News T: 020 3205 4510 E: [email protected]

Francesca CookeReal Estate EconomistT: 020 3205 4624 E: [email protected]

Mark Stansfield Senior Real Estate Analyst T: 020 3205 4589 E: [email protected]

Marianne FitzpatrickMarket EconomistT: 0141 354 0822E: [email protected]

Data, Analytics and News Have Come Together


CoStar Group

18

TO FIND OUT HOW COSTAR SUITE CAN BENEFIT YOU CALL 020 3205 4500 OR EMAIL [email protected]

ASSET MANAGEMENT 2.0 IS HERESuccessfully execute your business

plan with CoStar Suite.

Maximise rental value

Monitor your competition’s assets

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Manage lease rolls by retaining existing cash flows

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19

We feel at home in Real Estate Finance and Public Investment Finance in Germany and Europe. As a specialist bank, we have both extensive experience and the necessary skills to support your projects. Efficient structures and processes provide a client focused culture.

www.pfandbriefbank.com

Adding value

Tristan Capital Partners“Neukölln Arcaden”, BerlinShopping Centre€ 50 million

Grosvenor FundManagementSKHLM Shopping CentreSEK 1.875 billion

Metric Income PlusLimited PartnershipRetail Parks£ 125 million

La Française REMThree office buildings inBoulogne Billancourt &Issy-les-Moulineaux€ 79 million

CTPCTPark Bor€ 132 million

The FrenchgateLimited PartnershipFrenchgate Centre inDoncaster town centre£ 100 million

Orchard Street InvestmentManagementSt. Andrew’s Quay Park, Hull£ 47.75 million

Acquisition LoanGermanyJanuary 2015

Acquisition FinancingSwedenFebruary 2015

Investment LoanUnited KingdomSeptember 2014

Acquisition FinancingFranceDecember 2014

Refinancing LoanCzech RepublicMarch 2015

Refinancing LoanUnited KingdomSeptember 2014

Acquisition LoanUnited KingdomDecember 2014

pbb_ad_CoStar_210x297mm_UK_0415.indd 1 21.04.15 09:21

CoStar Group

20

Get in Touch with CoStar CoStar Group (Nasdaq: CSGP) is the leading provider of commercial real estate information, analytic and marketing services. Founded in 1987, CoStar conducts expansive on-going research to produce and maintain the largest and most comprehensive database of commercial real estate information.

Our suite of online services enables clients to analyse, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities.

CoStar maintains offices throughout the U.S. and in Europe with a staff of approximately 2,000 worldwide, including the industry’s largest professional research organisation.

CoStar Suite

London020 3205 4500

[email protected] www.costar.co.uk

Glasgow0141 354 0600

Manchester0161 971 2120

Interested in sponsoring future publications?Contact Richard Goff on 020 3205 [email protected] www.costar.co.uk

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