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Market Analysis Q1 08

VIEWS: 3 PAGES: 20

									London Offices
Market Analysis




                         Issue 1
                  Jan – Mar 2008
Agent Share by Number of Deals Done - Q1 2008

Rank      Agent Name                      No. of Deals               City   West End
     1    DTZ                                 44                      19       25            This analysis details the top agents by
     2    CB Richard Ellis                    32                      19       11            number of deals done, and has been split
    =3    Knight Frank                        24                      12        8            out to reveal, where applicable, which
                                                                                             office, and therefore which market, is
    =3    Richard Susskind & Co               24                                             more active.
     5    GVA                                 20                       8       12
                                                                                             Once again, DTZ is leading the table, and
     6    King Sturge                         19                      11        8            it continues to be more active in the West
    =7    Jones Lang LaSalle                  18                       5       12            End, although the gap is smaller than it has
    =7    E A Shaw                            18                                             been previously. Also more active in the
                                                                                             West End are GVA and Jones Lang LaSalle.
     9    Farebrother                         16
                                                                                             CB Richard Ellis is in second place, with
    =10   BH2                                 12                                             the same amount of deals in the City as
    =10   Strutt & Parker                     12                       6        6            DTZ, but half as many in the West End.
    =12   Godfrey Vaughan                     11                                             Third placed Knight Frank is also more
                                                                                             active in the City, as are all the other
    =12   Atisreal                            11                       6        3            agents in the table, where deals are
    =14   Cushman & Wakefield                 10                                             attributable to a specific office, with the
    =14   NB Real Estate                      10                       9        1            exception of Strutt & Parker which
                                                                                             completed six deals in each market.
    =16   Edward Charles & Partners             9                                            Richard Susskind is the only single office
    =16   Pilcher Hershman                      9                                            agent to appear in the top five, with 24
    =18   Ingleby Trice Kennard                 8                                            deals. Overall, in terms of numbers of
                                                                                             deals completed which are attributable to
    =18   Newton Perkins                        8
                                                                                             a specific office, the City currently has a
    =18   Allsop                                8                      6        2            slight lead over the West End – 110
    =18   Tuckerman                             8                                            compared with 93.
    =18   Langham Estate Management             8
    =23   MERJS                                 7
    =23   D E & J Levy                          7
    =23   Robert Irving Burns                   7
    =23   Dron & Wright                         7                      5        2
    =23   Savills                               7                      4        3



Top 5 Agents by Deals Done – Office Breakdown Q1 2008

                            DTZ                           GVA                                      Knight Frank




                                                                                               33%
                                    43%                              40%
                    57%                         60%                                                               50%



                                                                                                 17%



                     CB Richards Ellis                 King Sturge




                                                                                                       City
                    34%
                                                 42%
                                    60%                              58%                               West End

                    6%                                                                                 Docklands




1                                                                                      For all data enquiries call 020 7911 1881
                                                                                      London Offices Market Analysis
Central London Agents Market Share League Table – Q1 2008

Rank Agent                                                      Disposals (sq ft)        No Deals         Market Share
   1    CB Richard Ellis                                             620,426                  32               22%
   2    Knight Frank                                                 420,502                  24               15%
   3    DTZ                                                          402,540                  45               14%
   4    Atisreal/Morgan Pepper                                       321,592                  11               11%
   5    Jones Lang LaSalle                                           313,015                  18               11%
   6    BH2                                                          248,411                  12                9%
   7    King Sturge                                                  228,046                  19                8%
   8    Savills                                                      220,616                   7                8%
   9    Cushman & Wakefield                                          208,566                  10                7%
 10     Strutt & Parker                                              175,685                  12                6%
 11     GVA                                                          139,181                  20                5%
 12     Richard Susskind & Co                                         88,210                  24                3%
 13     Godfrey Vaughan                                               79,871                  11                3%
 14     Thompson Yates                                                78,168                   6                3%
 15     Farebrother                                                   73,030                  16                3%
 16     Edward Charles & Partners                                     67,201                   9                2%
 17     E A Shaw                                                      61,633                  18                2%
 18     Ingleby Trice Kennard                                         48,006                   8                2%
 19     NB Real Estate                                                40,085                  10                1%
 20     Newton Perkins                                                39,503                   8                1%
 21     Allsop                                                        34,093                   8                1%
 22     Smith Melzack Pepper Angliss                                  25,545                   2                1%
 23     MERJS                                                         24,987                   7                1%
 24     Tuckerman                                                     23,208                   8                1%         Milton Gate, EC1: Addleshaw Goddard
 25     Pilcher Hershman                                              22,932                   9                1%         takes 172,000 sq ft



CB Richard Ellis regains top spot
CBRE regained top spot this quarter, letting over 620,000 sq ft and taking 22% of the market share. It can largely attribute its position to a strong performance
across four of the markets this quarter, obtaining top five finishes in all but the Southern and City fringe, and claiming top spot in Docklands.The largest deal to take
place was the 164,930 sq ft letting to Moody’s Investors Services at 1 Canada Square, where CBRE acted jointly with Jones Lang LaSalle and Knight Frank.The space
was made available after Atisreal and Cherryman successfully negotiated the surrender of Telegraph’s lease back to freeholder Canary Wharf Group.This deal
undoubtedly helped seal its top place finish, but it was the consistency of letting activity throughout the quarter that led to the 200,000 sq ft lead CBRE took over
second placed Knight Frank which topped the 2007 full year market share table.
Knight Frank climbed two places on Q4 2007 and took 15% of the market share over 24 deals. As with CBRE, it had top five finishes in four of the markets, with
the exception of Midtown and Southern fringe. Aside from 1 Canada Square, its largest deal saw Lockton International take a prelet at the 83,980 sq ft St Botolph
House, 138-139 Houndsditch, EC3, joint with Cushman & Wakefield.
DTZ slipped to third place, after topping last quarter’s league table, completing an impressive 45 deals, more than any other agent. Its largest disposal was in a
transaction joint with BH2 at 30 Park Street, SE1, where Hyde Housing Association is planning to take the entire 50,950 sq ft proposed property upon completion
in Q3.The performances in the West End and Southern fringe markets ensured another high finish this quarter with the agent taking top spot in both markets.

Atisreal boosted by Morgan Pepper acquisition
Atisreal clinched fourth spot taking 11% of the market share and completing 321,590 sq ft of lettings.The improved league position is largely attributable to the
recent acquisition of City and Midtown market specialist Morgan Pepper, which prior to them joining forces had completed the largest transaction of the quarter at
Milton Gate, Chiswell Street, EC1, where 171,800 sq ft was taken by Addleshaw Goddard.This deal enabled them to take joint top place in the City fringe market,
alongside Savills, which also advised at Milton Gate. Elsewhere Atisreal advised on the prelet to Mitsui Sumitomo’s at the 56,000 sq ft Willis Building, 51 Lime Street,
EC3. Jones Lang LaSalle was pushed into fifth position after completing on 313,000 sq ft over 18 deals. Other than its joint transaction at One Canada Square, JLL
had two top five finishes, in the Docklands and West End markets. Its second largest deal however, was seen in the outer markets, with the British Heart Foundation
taking 35,500 sq ft at Greater London House, NW1.
BH2 took sixth place seeing top five finishes in both the City core and Southern fringe markets. Its largest deal completed at 150 Aldersgate Street, EC1, where
Moore Stephens & Co took 80,000 sq ft in a deal joint with King Sturge. Elsewhere, 35,500 sq ft was disposed of at Apollo Court, 5 Thomas More Square, E1, to
Global Tea & Commodities in a transaction joint with Knight Frank. Other than the letting at 150 Aldersgate Street, EC1, which secured its seventh place, King
Sturge was sole agent on the disposal of 55,350 sq ft at Cutlers Exchange 123 Houndsditch, EC3.
Savills slipped one place to eighth spot this quarter completing seven deals. Other than the Milton Gate transaction, it advised jointly with DTZ on the 17,900 sq ft
letting to Vestra Wealth at 14 Cornhill, EC3, and elsewhere the 11,730 sq ft sole instruction at The Blue Fin, 90 Southwark Street, SE1, where VT Communications
took the space on a ten year lease. Cushman & Wakefield climbed five places to ninth spot letting 208,900 sq ft and gaining a 7% market share.Two notable deals,
other than the letting at St Botolph House, saw Cushman & Wakefield achieve a top five finish in Docklands, with 33,200 sq ft taken by De Vere & Company at 1
Westferry Circus, and 30,100 sq ft taken by CLB Littlejohn Frazer at the same property, both joint with CBRE. Strutt & Parker completes the top ten, gaining 6% of
the market share over 12 deals. At the Stock Exchange building, it acted jointly with CBRE, on the 74,800 sq ft prelet to DTZ, and at Iona, 40 Argyll Street,W1, it let
27,600 sq ft, joint with Cushman & Wakefield, to Och Ziff.


For all data enquiries call 020 7911 1881                                                                                                                              2
Agents Market Share by Market Q1 2008
City Core                                                                                    West End
 Rank     Agent                    Disposals (sq ft) No Deals            Mkt Share            Rank     Agent                    Disposals (sq ft) No Deals              Mkt Share

    1     King Sturge                   198,985          11                 27%                 1      DTZ                            131,437          21                  19%
    2     CB Richard Ellis              183,069          13                 25%                 2      CB Richard Ellis               127,415          11                  18%
    3     BH2                           172,130          10                 23%                 3      GVA Saxon Law                   81,440          11                  12%
    4     Strutt & Parker               105,997           5                 14%                 4      Jones Lang LaSalle              80,043          11                  11%
    5     Knight Frank                  102,146           6                 14%                 5      Knight Frank                    69,935           8                  10%

King Sturge took top spot in the City core this quarter, disposing of 199,000 sq ft across   DTZ claimed first place in the West End completing a very impressive 21 deals and taking
11 deals, and achieving a 27% market share. Other than the deals already mentioned, one      19% of the market share. Its largest deal occurred at 1 Curzon Street,W1, where GLG
other notable transaction occurred at the London Underwriting Centre, 3 Minster              Partners took 30,300 sq ft of additional space. Elsewhere in a sole instruction, almost
Court EC3, where Catlin Underwriting Agencies took an additional 9,500 sq ft. CB             30,000 sq ft was let to Warburg Pincus International at Almack House, SW1. CBRE
Richard Ellis claimed second place this quarter completing the largest number of deals       slipped one place this quarter to second spot and took 18% of the market share. Its
and taking 25% of the market share. Other than the letting at the Stock Exchange             largest deal was the transaction joint with JLL at 9 Cavendish Square,W1, where
building, almost 29,000 sq ft was let to Miki Travel at Vintners Place, Upper Thames         Chevron Texaco UK took the entire 30,000 sq ft property on a prelet. GVA made the
Street, EC3, in a disposal joint with BH2, which took third place this quarter with a 23%    table this quarter taking third spot completing 81,000 sq ft worth of deals with its largest
market share over ten deals. Strutt & Parker let a respectable 106,000 sq ft this quarter    transaction being at Berkeley Square House,W1, where Regus took 23,200 sq ft of space
and made fourth position with its second largest deal taking place at the Stock Exchange     on the first floor at the property in a deal joint with CBRE. JLL took fourth place again
building, where Gide Loyrette Nouel took 22,200 sq ft on the 14th and 15th floors in a       this quarter completing 11 deals and letting a total of 80,000 sq ft. Other than its joint
disposal joint with CBRE. Knight Frank completed the City core table this quarter taking     disposal at 9 Cavendish Square, 18,600 sq ft was let at 51-53 Great Marlborough
14% of the market share. Its inclusion in the table was almost entirely due to the deal at   Street,W1, where four floors were taken by separate tenants. Knight Frank slipped to
St Botolph House, however it did complete an additional five deals, the most significant     fifth place, completing eight deals and taking 10% of the market share.The largest
of which was at 10 Gresham Street, EC2, where J.C. Flowers & Co took 8,000 sq ft on          transaction to take place was seen at 25 Victoria Street, SW1, where 18,000 sq ft was
part of the fourth floor in a deal joint with Jones Lang LaSalle.                            taken through a deal joint with CBRE by First Reserve Corporation.

Midtown                                                                                      City Fringe
 Rank     Agent                    Disposals (sq ft) No Deals            Mkt Share            Rank     Agent                    Disposals (sq ft) No Deals              Mkt Share

    1     Farebrother                     62,266         13                 29%                =1      Atisreal                       171,805           1                  38%
    2     Atisreal                        34,488          3                 16%                =1      Savills                        171,805           1                  38%
    3     DTZ                             32,032          3                 15%                 3      Thompson Yates                  78,168           6                  17%
    4     E A Shaw                        29,069          9                 14%                 4      Knight Frank                    64,836           5                  14%
    5     CB Richard Ellis                23,449          2                 11%                 5      Richard Susskind & Co           54,614          18                  12%

Farebrother climbed four places this quarter in Midtown to claim top spot after              Top place is shared between Atisreal, following its acquisition of Morgan Pepper, and
completing 13 deals, taking an impressive 29% of the market share.The largest deal to        Savills, with a 38% market share each, after both instructing on the largest deal of the
complete was at the Holborn Centre, 120-125 High Holborn, EC1, where the fourth              quarter at Milton Gate, Chiswell Street, EC1.Addleshaw Goddard took the space
floor, measuring 19,000 sq ft, was taken by Michael Page Holdings in a transaction joint     measuring 171,800 sq ft.Thompson Yates claimed third spot after successfully
with DTZ.Atisreal had a successful quarter in Midtown, achieving second place after          negotiating six deals. Four of these took place at Old Truman Brewery, E1, the largest
completing just three deals, the largest being the 15,000 sq ft disposal at Grove House,     of which was at the H Block where 45,400 sq ft was let to an undisclosed tenant.
Orange Street,WC2, where Avanta Business Centres took the space, in a deal joint             Knight Frank again managed a top five finish and took fourth place in Midtown, and
with Richard Susskind and Cluttons. DTZ claimed third spot taking 15% of the market          other than the disposals already mentioned 11,500 sq ft was let to Cunningham
share. Its largest deal to complete other than that at the Holborn Centre, saw               Lindsey International at International House, 1 St Katharine’s Way, E1, through a deal
Electronic Arts take 6,600 sq ft at Centre Point, 103 New Oxford Street,WC1, joint           joint with Ingleby Trice Kennard. Richard Susskind took fifth spot this quarter
with Atisreal and EA Shaw, which took fourth spot this quarter completing on 29,070          achieving a 12% market share after acting on 18 disposals. Only one deal of over
sq ft.The largest of its nine deals was 10,100 sq ft at 5 Richbell Place,WC1, to an          10,000 sq ft completed and this was at 154 Clerkenwell Road, where the entire
undisclosed occupier. CBRE completes the Midtown table taking fifth spot and 11% of          13,200 sq ft building was taken by Agent Provocateur.
the market share.The largest of its two deals was at Arundel Great Court,WC2, where
12,950 sq ft was taken by an undisclosed occupier through a deal joint with Atisreal.

Docklands                                                                                    Southern Fringe
 Rank     Agent                    Disposals (sq ft) No Deals            Mkt Share            Rank     Agent                    Disposals (sq ft) No Deals              Mkt Share

    1     CB Richard Ellis              284,061            5                87%                 1      DTZ                             76,423            2                 80%
    2     Knight Frank                  176,856            3                54%                 2      BH2                             50,947            1                 53%
    3     Jones Lang LaSalle            164,930            1                50%                 3      Savills                         11,731            1                 12%
    4     Cushman & Wakefield            63,308            2                19%                 4      Edward Symmons                   6,400            2                  7%
    5     DTZ                            24,744            3                 8%                 5      E A Shaw                         3,785            1                  4%

CBRE climbed up the table this quarter winning an 87% market share and claiming              DTZ claimed first place this quarter after finishing second in Q4 2007. It disposed of
top spot in Docklands. It completed five deals, with three occurring at One Canada           76,400 sq ft over two deals and took an impressive 80% market share. Other than
Square, and two at 1 Westferry Circus. Knight Frank achieved second place, seeing            the letting at 30 Park Street, it disposed of 25,500 sq ft at New City Court, 20 St
176,850 sq ft complete over three transactions. Other than the deal at One Canada            Thomas Street, where part of the first and entire second floor was taken by Guy's
Square, Knight Frank acted on the disposal of 10,300 sq ft at 5 Harbour Exchange             and St Thomas' NHS Foundation Trust. BH2 were second this quarter, completing just
Square, where the first floor was let to Cognizant Limited through a deal joint with         one transaction in the joint disposal of 30 Park Street. Savills climbed one place to
DTZ. JLL improved by two places on last quarter rising to third spot, seeing only one        third, and as with last quarter saw only one deal complete.This was the sole
deal complete, this being the 164,900 sq ft disposal at One Canada Square to                 instruction at The Blue Fin building, where VT Communications took 11,700 sq ft on
Moody’s. Cushman & Wakefield claimed fourth place this quarter completing two                a ten year lease. Edward Symmons completed two disposals this quarter and took 7%
deals and taking 19% of the market share, with both transactions taking place at 1           of the market share.The largest disposal was at Magdelene House, 136-148 Tooley
Westferry Circus, where a total of 63,300 sq ft was let. DTZ has again made the top          Street, where 4,000 sq ft was let to Planning Potential. E A Shaw saw its second top
five in Docklands with its largest deal occurring at the Isis building, 193 Marsh Wall,      five finish in the Southern fringe market, with only one deal completing, this was the
where Tawa Management took the 12,800 sq ft first floor.                                     3,800 sq ft disposal of the third and fourth floors at St Stephen’s House, 115
                                                                                             Southwark Bridge Road, to the Health Management Group.


3                                                                                                                            For all data enquiries call 020 7911 1881
                                                                               London Offices Market Analysis
Q1 2008
Key Transactions – All Markets
Market             Address                                          Tenant                                    Size (sq ft)   Agent
 City Fringe       Milton Gate, Chiswell Street, EC1                Addleshaw Goddard                             171,805    Atisreal/Savills
 Docklands         One Canada Square, E14                           Moody's Investors Service                     164,930    CB Richard Ellis / Jones Lang LaSalle /
                                                                                                                             Knight Frank
 City Core         St Botolph House, Houndsditch, EC3               Lockton International                          83,980    Cushman & Wakefield / Knight Frank
 City Core         150 Aldersgate Street, EC1                       Moore Stephens & Co                            80,000    BH2 / Kings Sturge
 City Core         Stock Exchange Building, Old Broad Street, EC2   DTZ                                            74,720    CB Richard Ellis / Strutt & Parker
 City Core         The Willis Building, Lime Street, EC3            Mitsui Sumitomo Insurance                      56,020    Atisreal
 Southern Fringe   30 Park Street, SE1                              Hyde Housing Association                       50,950    BH2 / DTZ
 City Fringe       Apollo Court,Thomas More Square, E1              Global Tea & Commodities                       35,460    Savills
 Docklands         1 Westferry Circus, E14                          De Vere & Company                              33,250    CB Richard Ellis / Cushman & Wakefield
 West End          Victoria Central, Buckingham Palace Road, SW1    Abbey Business Centres                         30,930    Atisreal / Godfrey Vaughan
 West End          1 Curzon Street, W1                              GLG Partners                                   30,340    DTZ
 West End          9 Cavendish Square, W1                           Chevron Texaco                                 30,080    CB Richard Ellis / Jones Lang LaSalle
 Southern Fringe   New City Court, St Thomas Street, SE1            Guy's & St Thomas' NHS Foundation Trust        25,480    DTZ
 Midtown           Holborn Centre, Holborn, EC1                     Michael Page Holdings                          18,980    DTZ / Farebrother
 Midtown           Grove House, Orange Street, WC2                  Avanta Business Centres                        14,980    Atisreal / Cluttons / Richard Susskind



Key New Instructions – All Markets
Market             Address                                          Grade                                     Size (sq ft)   Agent
 Midtown           33 Holborn, EC1                                  Secondhand                                    330,000    Cushman & Wakefield / Jones Lang LaSalle
 West End          1 Drummond Gate, SW1                             Secondhand                                    106,090    DTZ
 West End          Fortress House, Savile Row, W1                   Under Construction                             91,510    CB Richard Ellis / DTZ
 City Core         10 Lime Street, EC3                              Premarketing                                   53,480    GVA / Kinney Green
 Docklands         10 Upper Bank Street, E14                        Secondhand                                     53,440    CB Richard Ellis / GVA
 West End          Walmar House, Regent Street, W1                  Premarketing                                   52,500    Savills
 Docklands         25 Bank Street, E14                              Secondhand                                     40,300    Ingleby Trice Kennard
 City Fringe       21 Prescot Street, E1                            Secondhand                                     38,500    Jones Lang LaSalle
 Midtown           5 New Street Square, EC4                         Under Construction                             36,330    Savills
 Docklands         1 Churchill Place, E14                           Secondhand                                     33,100    Atisreal
 City Core         Fitzwilliam House, St Mary Axe                   Secondhand                                     30,220    King Sturge
 City Core         11 Devonshire Square                             Secondhand                                     27,710    CB Richard Ellis
 City Fringe       Sutton House, Great Sutton Street, EC1           Under Construction                             26,930    Anton Page / Stirling Ackroyd
 City Core         201 Bishopsgate, EC2                             Under Construction                             26,730    Jones Lang LaSalle / Knight Frank
 West End          1-11 Hay Hill, W1                                Premarketing                                   26,000    GVA / Knight Frank




For all data enquiries call 020 7911 1881                                                                                                                               4
Summary Statistics

                                                     City Core             City Fringe               Docklands              Midtown         Southern Fringe         West End                Overall

                                                 2006    2007    2008   2006   2007   2008      2006   2007    2008   2006   2007    2008   2006   2007   2008   2006   2007   2008   2006    2007    2008

                                                                 Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    Takeup (million sq ft) annual or quarter total

    New/Refurb existing                          1.70     0.42   0.01   0.36   0.26   0.18      0.45    0.32   0.00   0.26    0.30   0.03   0.40   0.57   0.00   1.10   0.77   0.07   4.27    2.64    0.29

    Premarketing                                 0.31     0.00   0.00   0.00   0.00   0.00      0.96    0.38   0.00   0.15    0.01   0.00   0.20   0.45   0.00   0.00   0.00   0.01   1.61    0.84    0.01

    Secondhand                                   2.49     2.39   0.49   0.91   1.04   0.27      0.37    0.32   0.33   1.09    1.13   0.18   0.44   0.47   0.04   2.15   2.80   0.56   7.45    8.14    1.88

    Under Construction                           0.29     0.99   0.23   0.04   0.00   0.00      0.00    0.00   0.00   0.28    0.19   0.00   0.06   0.19   0.05   0.32   0.64   0.06   0.99    2.00    0.34

    Total                                        4.79     3.80   0.74   1.30   1.30   0.45      1.78    1.02   0.33   1.77    1.63   0.21   1.10   1.68   0.10   3.57   4.21   0.69   14.31 13.63     2.51

    Availability (million sq ft) annual quarterly average or quarter end

                                                                 Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    New/Refurb existing                          0.93     0.27   0.25   0.49   0.33   0.34      0.50    0.10   0.03   0.30    0.23   0.19   0.22   0.10   0.03   0.67   0.30   0.32   3.11    1.34    1.16

    Premarketing                                 5.92     7.74   7.34   1.12   1.62   2.19      6.78    5.40   4.36   0.97    0.69   0.32   1.06   0.85   0.79   2.16   2.22   1.67   18.02 18.53 16.68

    Secondhand                                   3.96     3.04   3.22   2.54   1.96   1.61      1.03    0.88   0.72   1.72    1.34   1.77   0.34   0.27   0.48   3.14   2.25   2.45   12.74   9.74    10.25

    Under Construction                           2.39     4.56   5.94   0.37   0.46   0.34      0.00    0.92   3.06   0.85    0.93   1.31   0.60   0.25   0.00   1.23   1.09   1.48   5.44    8.21    12.14

    Total                                       13.19 15.61 16.76       4.53   4.37   4.49      8.32    7.30   8.18   3.84    3.19   3.58   2.23   1.48   1.30   7.20   5.86   5.92   39.31 37.82 40.22

    Availability Rate % annual average or quarter
                                                                 Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    %                                           8.89% 6.21% 6.45% 14.61% 11.00% 9.30% 8.44% 5.54% 4.46% 6.63% 5.13% 6.46% 5.95% 3.65% 4.91% 6.07% 4.15% 4.51%                         8.43% 5.95% 6.02%

    Under Offer and Withdrawn (million sq ft) quarter or quarterly average

                                                                 Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    Under offer                                  0.73     0.74   1.29   0.25   0.31   0.12      0.23    0.20   0.05   0.33    0.29   0.13   0.17   0.16   0.02   0.52   0.42   0.32   2.22    2.11    1.94

    Withdrawn                                    0.53     0.18   0.93   0.09   0.08   0.05      0.13    0.02   0.05   0.16    0.10   0.10   0.14   0.02   0.01   0.25   0.17   0.03   1.30    0.58    1.18

    Average Asking prices (£psf) quarter or quarterly average

    *New leases only                                             Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    New Build Existing                          £46.08 £59.92 £64.36 £36.51 £48.22 £49.00 £37.44 £31.96 £37.25 £41.34 £62.52 £47.25 £34.93 £44.87 £48.25 £72.09 £84.26 £84.25 £44.73 £55.29 £55.06

    Second-hand Grade A                         £31.68 £39.86 £44.14 £23.13 £27.03 £32.69 £22.11 £25.55 £29.24 £36.51 £40.41 £45.40 £27.96 £30.47 £33.69 £40.32 £50.91 £57.01 £30.29 £35.71 £40.36

    Investment Sales (million sq ft) Annual or quarter total

                                                                 Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    Total sq ft                                 10.43     6.47   0.60   2.20   1.66   0.02      1.32    3.42   0.00   2.66    3.67   0.31   0.81   0.31   0.68   3.59   2.43   0.65   21.01 17.94     2.26

    No Transactions                              120       60     6      57     52       2       8      12       0     62     48      8      9      17     4     146    102     21    402     291      41

    Construction Starts (million sq ft) Annual or quarter total

                                                                 Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    Total started                                2.49     4.18   0.69   0.68   0.06   0.13      0.36    3.07   0.38   0.64    1.13   0.14   0.19   0.05   0.00   1.86   1.00   0.46   6.22    9.50    1.80

    Pre-let                                      0.16     0.00   0.00   0.00   0.00   0.00      0.36    0.73   0.00   0.05    0.16   0.00   0.00   0.00   0.00   0.40   0.05   0.02   0.97    0.94    0.02

    Speculative                                  2.33     4.18   0.69   0.68   0.06   0.13      0.00    2.34   0.38   0.58    0.97   0.14   0.19   0.05   0.00   1.46   0.95   0.44   5.24    8.55    1.78

    Completed Space Still available (million sq ft) (completion by full year or part of year)

                                                                 Q1                    Q1                      Q1                     Q1                  Q1                   Q1                     Q1

    Total completed                              0.37     1.34   0.21   0.11   0.46   0.03      0.00    0.00   0.00   0.18    0.84   0.03   1.29   0.39   0.00   1.00   0.40   1.01   2.95    3.43    1.27

    Still available                              0.02     0.03   0.07   0.03   0.03   0.01      0.00    0.00   0.00   0.03    0.10   0.00   0.03   0.00   0.00   0.03   0.08   0.16   0.13    0.24    0.24

    Future Completions (million sq ft) for full year or part of year

    Delivery date                                2008    2009    2010   2008   2009   2010      2008   2009    2010   2008   2009    2010   2008   2009   2010   2008   2009   2010   2008    2009    2010

    Total to complete                            4.10     2.65   0.34   0.34   0.14   0.00      0.49    1.58   0.60   0.77    1.00   0.00   0.24   0.00   0.45   2.78   0.86   0.48   8.71    6.23    1.86

    Amount still available                       3.32     2.56   0.20   0.34   0.14   0.00      0.13    0.59   0.60   0.60    0.84   0.00   0.00   0.00   0.00   1.36   0.81   0.00   5.74    4.95    0.80

    % still available                            81%      97%    60%    100% 100%      0%       26%     37%    100%   78%     84%     0%    0%     0%     0%     49%    95%    0%     66%     79%     43%




5                                                                                                                                                    For all data enquiries call 020 7911 1881
                                                                                        London Offices Market Analysis
Overview

Introduction
After the poor end to 2007, with the credit crisis starting to take its toll on market activity and concerns over debt structures spiralling,
it was always going to be a cautious start to the year ahead.With a large development pipeline established, 8.7 million sq ft is set to
complete this year alone, subdued letting activity could not have come at a worse time. Of the stock due to complete, 65% is currently
available. Last quarter saw companies showing negative returns and the IPD index indicated the worst return on property investment
since the 1990’s crash, comparisons to which were already being made.
There is no doubt that the market is suffering from the fallout in the sub prime credit markets, with take up as a whole declining by 2.5%
on the already low levels of last quarter. Only three markets showed improvements in activity, the City core, City fringe, and Docklands.
However, the amount of space taken in the City core is still incredibly low. Market confidence has been poor and deals have been few and
far between. Overall, supply levels have yet to reveal the severity of the current slump, as little space has completed this quarter, the
exception being the West End market.The impact of low market activity will unfold as 2008 progresses as a flood of vacant stock
completes across London and is released to the market.This in turn will suppress rental growth and cause availability rates to slacken.
A divide in fortunes is evolving between the City and West End. Understandably, the City is suffering the brunt of the change in financial
occupier demand and the West End is taking comfort from the much needed injection of newly completed stock. Investment prices are
being restructured so opportunities are there for investors with access to capital.
                                                                                                                                                     Metropole Building,WC2:
Investment: Can re-pricing of assets turn the corner on stifled investment activity?                                                                 Sold for £130m
However, for Q1 at least, investment activity as a whole was restrained with only 41 deals completing.The deals which have completed
have tended to be at ‘cut prices’ as space is perceived to be overpriced and transactions of high risk.The fall in capital values has inevitably
resulted in rising yields, which has improved capital income for those relying on rent returns. However, with capital values falling by as
much as 15%, short term gains are poor with investors having to secure funding against lower value portfolios.
Those investors reducing their exposure to the UK market are focussing attentions on overseas ventures, where market conditions are
more stable and short term prospects more risk averse.This, coupled with the UK losing ground in the competitiveness of its corporation
tax rate, has undoubtedly damaged London’s investment appeal. According to a survey carried out by PricewaterhouseCoopers and the
Urban Land Institute, the Capital has slipped to 15th place in investment popularity, down from 2nd place in 2006.This fall was seen last
quarter where Irish investment in London dropped to €4.7 billion, down by 15% on 2006, interrupting three consecutive years of
spending growth. Several large companies have decided to vacate the UK to foreign offices, including internet search engine Yahoo, which
plans to re-locate to Geneva.
The fall in capital values is addressing this, and are beginning to attract other sources of foreign investment, particularly from the Middle
East, China and Dubai, where their ‘petrol dollars’ are now likely to posses greater purchasing power.This quarter the £130 million
Metropole Building, Northumberland Avenue,WC2, was purchased by Istithmar, the Dubai investment fund.
It is not only foreign investors ready to take advantage in adjustment in capital values. UK ‘opportunity funds’ that have sufficient capital to
invest are also being tempted by the lower pricing of available stock. Helical Bar Investments has stated that the re-pricing of assets has
renewed its interest in a market it was previously priced out of.
Adjustments are slowing and some have claimed that the bottom has been reached, after the sale of New Star UK Property Unit Trust’s
60 Gracechurch Street, EC3, was sold to Evans Randall for just £127.5 million after it was placed on the market for £145 million.

Activity stalls
This quarter has seen take up stall. Although the City core saw a slight increase in take up on Q4 2007, it is obviously heavily reliant on
financial occupiers. Recent news of the collapse of global investment bank Bear Stearns, and losses published by Citibank and Merrill
Lynch, is not a good sign. Questions are now being asked over occupier demand and its ability to absorb the vacant stock completing in
2008. Consequently starts have now been pushed back, as developers strive to achieve substantial prelets.The prospect of cut backs at
many City banks has also led to large requirements being postponed. Both Macquarie and Investec are delaying expansion and an
estimated 300,000 sq ft requirement has been put back until a later date. Many corporations have opted for flexible space on short terms
until the market stabilises, resulting in a strengthening serviced office sector. Asking rents for new build stock have been affected by this,
and have therefore began to increase at a slower rate.
The West End has fared better this quarter, despite seeing take up levels fall by 22%. A much needed supply of new stock completed,
84% of which has already been prelet.This will ensure that the market will not be swamped by vacant stock and availability rates remain
contained. Unlike the City core, the West End appears to have a stable development pipeline, and due to its multi-occupier market, the               20 Fenchurch Street, EC3:
effects of the credit issues have been softened.                                                                                                     Construction start may
                                                                                                                                                     be pushed back
Outlook for 2008
The effects of the credit crisis are being uncovered and they appear to be rather deep rooted.The economic downturn at the end of 2007
has continued into 2008. Occupier demand is tenuous, developers are unsure of the future, and the pricing of assets is subject to review.
With current volumes of activity both for take up and investment sales being low, coupled with a growing speculative development pipeline,
the outlook for the remainder of 2008 is concerning. Activity for the forthcoming quarters is expected to be even slower, and is likely to
be dependant on two things: when the debt market begins to improve, and how much impact there will be on the occupier market.
The West End is expected to see increased asking rents as more new stock completes and occupier demand remains high. In contrast, if
levels of activity do not increase it is likely that City rents could stall or possibly fall as the large supply of new space completes, exceeding
the current demand.
The employment market is showing signs of suffering, with the financial services industry being hit the hardest. Cut backs of between
10,000 and 20,000 employees are expected as many investment banks release poor results. It has been reported that the continuing credit
crunch has led to the financial services sector reducing its spending on land and buildings to the lowest level since June 1992.
The outlook for 2008 appears fairly gloomy, for the City especially. Despite this, it is important to remember that the property market is
cyclical. Re-pricing of assets began to show signs of slowing in February and although capital values have fallen, rents as a whole have
remained stable.The London office market is also a consistent performer and during the current economic downturn has once again
outperformed returns seen in other markets.


For all data enquiries call 020 7911 1881                                                                                                                                 6
City Core
                                                                          % +/-     % +/-                       % +/-      Take Up
Take up (sq ft)                               Q1 2008                 24 months 12 months                    3 months      The disappointing take up figures in the City core seen
                                                                                                                           at the end of 2007 have continued in to Q1 2008 with
    New/Refurb existing                        14,874                  -95.78                 -92.41          -74.06       levels of activity rising by only 3%.Take up of new or
    Premarketing                                    -                     n/a                    n/a             n/a       refurbished space was down by 74% on last quarter
    Secondhand                                494,214                   15.01                 -14.98            5.44       with only three deals completing. As with Q4 2007, no
                                                                                                                           pre marketed space was taken this quarter, however,
    Under Construction                        229,552                  276.32                    n/a           18.41       take up of stock under construction is up by 18% with
    Total                                     738,640                  -12.41                  -4.98            2.60       five deals completing.
                                                                                    The most significant deal to take place this quarter was
the 83,980 sq ft prelet to insurance broker Lockton International on the first and second floors at St Botolph House, EC3.The property
is currently under construction and due for completion in 2009. Elsewhere DTZ took 74,700 sq ft at The Stock Exchange building, 125
Old Broad Street, EC3, on a 20 year lease.
Take up of secondhand stock rose slightly this quarter with two notable deals completing.The largest saw Moore Stephens & Co take the
entire 80,000 sq ft at 150 Aldersgate Street, EC1, on an assignment from Addleshaw Goddard, it plans to take occupation of the space
later this year when Addleshaw Goddard moves to Milton Gate. Secondly, Mitsui Sumitomo Insurance took 56,020 sq ft at the Willis                                                          St Botolph House, EC3:
Building, 51 Lime Street, EC3, and plans to take occupation in May 2008 when the Willis Group is planning to vacate to other existing                                                     Lockton International
London offices, including some additional space at the same building.                                                                                                                     takes 84,000 sq ft

The disappointing levels of activity have not affected the volume of space placed under offer this quarter, a total of 1.29 million sq ft.
The largest amount of space to gain interest was at St Alphage House, 2 Fore Street, EC2, where the entire proposed one million sq ft
development recently went under offer to JP Morgan, a deal which would provide a much needed boost to take up levels should it complete.
A sense of stability and renewed interest appears to be required if the City core is to avoid falling into a slump, however this may be a
long way off for this market which seems to be feeling the brunt of reduced occupier demand caused by the financial uncertainties in the
current market conditions.

Supply
Supply dropped by almost 6% on last quarter, but was still up by 30% on this time last year.This was not a result of improved take up
levels for the quarter but largely due to a decreased amount of space being actively premarketed, down by 16% on Q4 2007.This
reduction largely came in the form of Great Portland Estate’s 815,000 sq ft proposed property at 100 Bishopsgate, EC2, being withdrawn
from the market until a date closer to the construction start, which is yet to be determined, although completion is currently scheduled
for Q4 2012.
                                                                                                                           Supply of new or refurbished stock increased slightly
                                                                          % +/-      ft
                                                                                  Sq % +/- Mkt Shr+/-
                                                                                                %                          this quarter with three schemes totalling 210,000 sq ft
Supply (sq ft)                                Q1 2008                 24 months 12 months 3 months
                                                                                                                           completing compared to 390,000 sq ft in Q4 2007.The
                                                                                                                           largest scheme to complete was British Land’s 122,310
    New/Refurb existing                         246,855                -82.48                 -20.98            3.26
                                                                                                                           sq ft development at Ludgate West, EC4, where 37,440
    Premarketing                              7,343,228                 58.99                  25.46          -15.52       sq ft remains available and is being actively marketed.
    Secondhand                                3,223,488                -27.59                  -0.27            4.00
                                                                                   Supply of space under construction has increased this
    Under Construction                        5,944,655                214.36                  70.38            3.42
                                                                                   quarter rising by 3% on Q4 2007 and by 70% on this
    Total                                    16,758,226                 35.48      time last year. In total seven schemes got underway,
                                                                                               30.04           -5.74
                                                                                   totalling 685,670 sq ft, none of which has seen any
preletting activity.The largest scheme to go under construction is Heron International’s 471,880 sq ft Heron Tower, EC2, which is
scheduled for completion in Q1 2011. Second to this is the proposed 115,550 sq ft development at 1 Lothbury, EC2, due for completion
in Q2 2009.
Supply of secondhand stock has also risen this quarter, increasing by 4% on Q4 2007.The largest amount of secondhand stock to come to
                                                                                                                                                                                          Stock Exchange Building, EC3:
the market was at Fitzwilliam House, EC3, where the basement, ground and first floors, totalling 30,220 sq ft, became available.
                                                                                                                                                                                          DTZ takes 74,700 sq ft
As already mentioned, the amount of withdrawn stock this quarter has increased significantly on Q4 2007 and this time last year with a
total of thirteen properties being taken off of the market, totalling over 930,000 sq ft, the majority of which is at 100 Bishopsgate, EC2.
Elsewhere, at Royal London House, Finsbury Square, EC2, 59,370 sq ft was taken off of the market.

Availability Rates                                                                                             Availability Rates
                                                                                                               Availability rates have risen in the City core this quarter rising to
        Availability Rate (%)                                                                                  6.45% from 6.14% last quarter.The low take up levels seen so far
 12
                                                                                                               this year outweighed the slightly reduced supply levels and could
 10                                                                                                            not prevent an increase in vacant stock to the market, causing
                                                                                                               availability rates to rise. Despite this, levels are still somewhat down
    8                                                                                                          on the 6.7% seen in Q1 2007.There is growing concern however,
    6
                                                                                                               that with occupier demand becoming more subdued and large
                                                                                                               amounts of space scheduled to complete in the following quarter,
    4                                                                                                          much of which remains available, availability rates could continue to
                                                                                                               rise.
    2

    0
                06          06          06           07          07            07          07           08
              20          20          20           20          20            20          20           20
          2           3           4            1           2             3           4            1
         Q           Q           Q            Q           Q             Q           Q            Q




7                                                                                                                                                            For all data enquiries call 020 7911 1881
                                                                                                                                                                                                                                          London Offices Market Analysis

Asking Rents                                                                                                                                                                                                        Asking Rents
                                                                                                                                                                                                                    Asking rents started to show signs of a decline this quarter for new
     £ (per sq ft)
70                                                                                                                                                                                                                  build stock. Following the slowdown of Q4 2007 and the lacklustre
                                                                                                                                                                                                                    start to 2008 in terms of take-up figures the average now stands at
60
                                                                                                                                                                                                                    £64.36 per sq ft, down from the £64.55 per sq ft of last quarter.
50                                                                                                                                                                                                                  Asking rents for secondhand stock have continued to increase
40                                                                                                                                                                                                                  slightly to £44.14 per sq ft, up from £41.85 per sq ft last quarter. An
                                                                                                                                                                                                                    increased rent has been released at City Place House, 55 Basinghall
30
                                                                                                                                                                                                                    Street, EC2 where the rent for the second floor now stands at
20                               New Build (existing)                                                                                                                                                               £49.50 per sq ft. However, several properties have seen rents fall
10                               Secondhand                                                                                                                                                                         for secondhand space, with asking prices dropping at Vintners Place,
                                                                                                                                                                                                                    EC2 and Cheapside House, EC2, by £2.50 and £5 per sq ft
 0
                                                                                                                                                                                                                    respectively.
               06                           06                         06                       07                           07                          07                         07                     08
           20                             20                      20                          20                          20                        20                         20                     20
       2                              3                       4                        1                              2                        3                           4                      1
      Q                          Q                           Q                        Q                          Q                           Q                        Q                          Q
                                                                                                                                                                                                                    Construction
                                                                                                                                                                                                                    Following the high levels of speculative starts seen over the past
Construction Starts with Prelets                                                                                                                                                                                    two quarters, we saw a drop in construction starts this quarter                                                                                                 One Lothbury, EC2:
                                                                                                                                                                                                                    with only 690,000 sq ft getting underway, half as much as last                                                                                                  116,000 sq ft gets underway
                Space (sq ft)
                                                                                                                                                                                                                    quarter.The largest scheme to go under construction, other than
2000000                                                                                                                                                                                                             the Heron Tower, EC2, and 1 Lothbury, EC2, was Frogmore’s 33,
                                                                                                                                                                                                                    270 sq ft 46-50 St Mary Axe, EC3, which started in February. None
1600000                                                   Speculative                                                                                                                                               of the space that started this quarter has been prelet and with
                                                          Prelet                                                                                                                                                    construction starts looking to return to a high level in Q2, when
1200000                                                                                                                                                                                                             1.46 million sq ft is scheduled to begin, it appears that the market
                                                                                                                                                                                                                    could be swamped with space if preletting activity does not
 800000
                                                                                                                                                                                                                    increase.The largest scheme set to get underway in Q2 will be the
 400000                                                                                                                                                                                                             Pinnacle Tower, EC2, where 1.26 million sq ft is expected upon
                                                                                                                                                                                                                    completion in 2011.
           0
                                 06                     06
                                                                          Only three schemes completed this quarter, totalling 206,670 sq ft,
                                                                                 06                         07                      07                        07                        07                     08
                            20                     20                       20                         20                      20
                                                                          the largest being the 122,300 sq ft Ludgate West, EC4, where                   20                        20                     20
                        2                      3                       4                           1                       2                         3                         4                      1
          Q      Q       Q      Q      Q      Q      Q       Q
                                                                          84,270 sq ft was prelet in Q3 2007. Next quarter there is set to be
                                                                          an abundance of completed new or refurbished space on the
market with over 2.5 million sq ft due for completion, a huge 2.06 million of which remains available.The largest scheme set to complete
is British Land’s 201 Bishopsgate, EC2, where 101,500 sq ft is still on the market. Second to this is DB Real Estate and Canary Wharf
Group’s 200 Aldersgate Street, EC1 development where the entire 357,840 sq ft remains available.The remainder of 2008 is set to see
4.1 million sq ft of space complete, with a remarkable 81%, 3.3 million sq ft, of this space yet to be let.
With occupier demand currently at a low, the outlook for the remainder of the year appears to be rather bleak.The large volumes of
space currently under construction seem to suggest high occupier demand, however, with the City core relying largely on the financial
services market, and this area being hit by the current market credit issues, demand for new space may be on the decline.There is now
the growing possibility that several schemes will be put on hold until conditions pick up.This has been seen at Land Securities Walkie
Talkie Tower, 20 Fenchurch Street, EC3, where construction may not start if the current conditions continue and no substantial prelet is
achieved. Elsewhere, work has stopped at Exemplar Properties 93,000 sq ft, 67 Lombard Street, EC3, where the developer is looking for a
new funding partner or to sell the site, which it owns with Morgan Stanley Real Estate Fund.


Completed Space Actively Marketed                                                                                                                                                                                    Completions with Space Available
                    Space (sq ft)                                                                                                                                                                                                Space (sq ft)
     600000                                                                                                                                                                                                            2500000                                                                                                                                 To Complete
                                                                                                                                                                                                                                                                                                                                                                                    Ludgate West, EC4:
     500000                                                                                                                                                                                                                                                                                                                                                    Still Available      122,300 sq ft completes
                                                                     Complete                                                                                                                                          2000000
     400000                                                          Still Available
                                                                                                                                                                                                                       1500000
     300000
                                                                                                                                                                                                                       1000000
     200000

     100000                                                                                                                                                                                                             500000

                0                                                                                                                                                                                                            0
                               0  6                   0 6                 0  6                   0 7                     0 7                    07                    07                    08                                         08         08         08         08         09         09         09         09         10         10         10         10         11 011
                            20                     20                  20                     20                      20                     20                    20                    20                                          20         20         20         20         20         20         20         20         20         20         20         20         20    2
                     2                         3                   4                      1                       2                      3                     4                    1                                            1          2          3          4          1          2          3          4          1          2          3          4          1       3
                    Q                      Q                     Q                    Q                          Q                   Q                    Q                        Q                                         Q            Q          Q          Q          Q          Q          Q          Q          Q          Q          Q          Q          Q       Q



Investment
On a slightly more positive note, investment sales this quarter began to rise for the City core, with 600,000 sq ft of office space being
sold across six transactions, up from the 490,000 sq ft seen last quarter. However, this value is still much lower than Q1 2007 where 1.37
million sq ft was sold across 22 schemes. It has become evident that properties are beginning to sell for cut prices as the current pricing
correction continues to affect the market.The most valuable deal to go through this quarter was the £145 million sale of 10 Queen
Street Place, EC4, where the long leasehold was initially placed on the market for £180 million. A group of private Irish Investors, backed
by the Anglo Irish Bank, bought the long leasehold from Morley Fund Management.




For all data enquiries call 020 7911 1881                                                                                                                                                                                                                                                                                                                                                                8
West End
                                                                          % +/-     % +/-                      % +/-      Take Up
Take up (sq ft)                                   Q1 2008             24 months 12 months                   3 months      West End take up was again disappointing this quarter
                                                                                                                          with figures dropping by 22% on last quarter and 43%
    New/Refurb existing                        67,821                  -83.98                  -78.03        -63.76       on this time last year.Take up of new or refurbished
    Premarketing                                7,007                     n/a                     n/a           n/a       stock plummeted by 64% on last quarter. Only five
    Secondhand                                555,391                   45.87                   -5.02         -4.41       deals of this grade completed with a total of 67,820 sq
                                                                                                                          ft being let.The largest letting to occur was at Victoria
    Under Construction                         57,637                     n/a                  -82.12        -47.04       Central, 111 Buckingham Palace Road, SW1, where
    Total                                     687,856                  -14.45                  -43.42        -21.57       30,930 sq ft was let to Abbey Business Centres on a
                                                                                                                          new sublease from the Pacific Group.
Take up of space under construction also declined this quarter and was down by 47% on last quarter.The largest letting to take place in
the West End this quarter of space of this grade was at 9 Cavendish Square,W1, where Chevron Texaco took Freshwater’s entire 30,080
sq ft on a prelet at the proposed property, which is due for completion next quarter. Second to this was the 27,560 sq ft letting to Och
Ziff at Iona, 40 Argyll Street,W1, where the tenant plans to take occupation in May 2008 once the property completes.
Lettings of secondhand stock dropped this quarter, down by 4% on last quarter and 5% on this time last year with only 555,390 sq ft
being taken.The largest deal to take place was the letting at 1 Curzon Street,W1, where GLG Partners took 30,330 sq ft and elsewhere,                                                  9 Cavendish Square,W1:
23,500 sq ft was let at Ashdown House, 123 Victoria Street, SW1, to Transport for London on a short term sublease from the                                                             Chevron Texaco prelets
Government department until December this year.                                                                                                                                        30,000 sq ft

Only one letting of premarketed space took place when serviced office space provider Regus took an additional 7,000 sq ft at Berkeley
Square House,W1, where it plans to take occupation in Q4 2008 following the refurbishment from A2 to B1 use.
A total of 329,100 sq ft went under offer this quarter, up from the 237,000 sq ft seen in Q4 2007 but down from the 462,850 sq ft of this
time last year.The largest single unit to be placed under offer was the 23,120 sq ft seventh floor (south block) at the newly refurbished 55
Baker Street,W1.


                                                                          % +/-      ft
                                                                                  Sq % +/- Mkt Shr+/-
                                                                                                %
                                                                                                                          Supply
Supply (sq ft)                                    Q1 2008             24 months 12 months 3 months                        Supply for the West End market rose slightly this
                                                                                                                          quarter increasing by 5%, bolstered by a 72% increase
    New/Refurb existing                         317,229                -60.71                  -26.40        71.56        in new or refurbished stock to the market.The largest
                                                                                                                          addition of this grade of space was at Portman Estates
    Premarketing                              1,671,638                -23.45                  -30.14        -9.94        55 Baker Street,W1, which saw a refurbishment of the
    Secondhand                                2,448,293                -31.97                   -8.06         2.85        503,565 sq ft property complete. Another large scheme
    Under Construction                        1,479,097                 -1.50                   28.30        20.48        to complete was Terrace Hill’s 60,210 sq ft Davis
                                                                                                                          House,Wilton Road, SW1, where the entire building
    Total                                     5,916,257                -26.88                  -10.89         4.73        remains available.
Supply of stock under construction also increased, by 20% on last quarter. This increase is largely due to Development Securities’ 349,000
sq ft 2 Kingdom Street going under construction. Elsewhere at Legal & General’s Fortress House, 23 Savile Row,W1, the 91,500 sq ft
proposed property went under construction.
Supply of secondhand stock increased this quarter, rising by 3% on Q4 2007, with 2.45 million sq ft currently available.The largest new
addition to the market was 1 Drummond Gate, SW1, where the Office of National Statistics is set to vacate the 106,000 sq ft property
to new premises in Islington in Q2 2008.
The West End has seen a slight decrease in supply of premarketed stock this quarter, falling by 10% on Q4 2007, and 16% on this time
last year. Newly premarketed stock includes three schemes, the largest of which is Great Capital Partnership’s 52,500 sq ft speculative
development at Walmar House, 300 Regent Street,W1, which is yet to have a planning application submitted, but is expected to have a
completion date scheduled for early 2009 should permission be given.
Following the low levels of withdrawals from the market in the West End last quarter, this quarter has seen a small increase with 30,000                                               1 Curzon Street,W1:
sq ft spread over 10 schemes being taken off of the market.The largest property to be taken off of the market was the 4,930 sq ft second                                               GNG Partners takes
floor at 46 Gillingham Street, SW1, following a deal which fell through.                                                                                                               30,000 sq ft

                                                                                                              Availability Rates
Availability Rates                                                                                            The availability rate for the West End continued to increase this
                                                                                                              quarter, rising to 4.5% from the 4.2% seen last quarter, where it had
         Availability Rate (%)                                                                                risen for the first time since Q4 2004. In comparison to Q4 2007, a
    12
                                                                                                              much higher level of new or refurbished stock completed this
    10                                                                                                        quarter with over 158,930 sq ft currently still available.This,
                                                                                                              coupled with poor take up of this grade, down 64% on last quarter,
     8
                                                                                                              has resulted in a higher availability rate. However, demand for good
     6                                                                                                        quality stock has always been high in the West End and it is
                                                                                                              expected that this will be absorbed through take up.
     4
                                                                                                              The number of speculative starts was lower this quarter with only
     2
                                                                                                              115,010 sq ft getting underway, and 23,250 sq ft of this space has
     0                                                                                                        already been prelet. However, there is a large amount of space set
                 06          06          06          07          07           07          07           08     to complete in Q4 2008, 738,450 sq ft of which is still available.This
               20          20          20          20          20           20          20           20
           2           3           4           1           2            3           4            1            will need to be taken through increasing take up levels if the
          Q           Q           Q           Q           Q            Q           Q            Q
                                                                                                              availability rate is to remain at a low level.




9                                                                                                                                                         For all data enquiries call 020 7911 1881
                                                                                                                                                                                                                      London Offices Market Analysis

Asking Rents                                                                                                                                                                                    Asking Rents
                                                                                                                                                                                                Asking rents rose for new build stock this quarter and are back to
        £ (per sq ft)
  105                                                                                                                                                                                           the high levels seen prior to the decline of Q4 2007. A much
                                                                                                                                                                                                needed supply of new build space has become available and the
   90
                                                                                                                                                                                                average asking rent now stands at £84.25 per sq ft up from the
   75                                                                                                                                                                                           £66.88 per sq ft seen last quarter. A new addition to the market,
   60
                                                                                                                                                                                                which has been largely responsible for this increase, is the newly
                                                                                                                                                                                                built 65 Grosvenor Street,W1, (former Broadbent House) where
   45                                                                                                                                                                                           the entire 25,000 sq ft property is on the market at a quoting rent
   30                             New Build (existing)                                                                                                                                          of £135 per sq ft.The building, which is typically favoured by wealth
                                  Secondhand
                                                                                                                                                                                                management companies, hedge funds and private equity occupiers,
   15
                                                                                                                                                                                                had previously been rumoured to have had an offer submitted to
    0                                                                                                                                                                                           the developers in the region of £150 per sq ft during construction.
                06                         06                        06                  07                       07                      07                    07                       08
              20                         20                      20                  20                      20                       20                      20                     20
          2                          3                       4                   1                       2
                                                                     Asking rents for seconhand stock dropped very slightly this 3                        4                      1
        Q                         Q                         Q                   Q                    Q                          Q                    Q                       Q
                                                                     quarter, down from £59.20 to £57.40 per sq ft, the first drop for
two years.This could be due to the large amount of new stock which has completed, attracting a large amount of attention from
                                                                                                                                                                                                                                                                                                                                                                55 Baker Street,W1:
occupiers currently seeking high quality space, which the West End market was previously lacking.
                                                                                                                                                                                                                                                                                                                                                                23,000 sq ft under offer

Construction
Construction work began this quarter on five schemes totalling 464,000 sq ft, only 23,000 sq ft of which has been prelet.The largest
scheme to get underway was Development Securities’ 2 Kingdom Street, which is being marketed by CB Richard Ellis and Savills.
Elsewhere, Derwent London’s 47,260 sq ft Charlotte Building, 16-19 Gresse Street,W1 started, where an agent is yet to be appointed.
Of the properties under construction / refurbishment only one has seen any signs of preletting activity.This is the 23,250 sq ft 18-24
                                                                     Howland Street,W1, which has been entirely prelet to Arup who
 Construction Starts with Prelets                                    were also in occupation of the previous property on site.
              Space (sq ft)                                                                                                                                                                     This quarter has seen six schemes complete, totalling one million
 1500000                                                                                                                                                                                        sq ft with the largest scheme, other than the previously mentioned
                                                                                                                            Speculative
                                                                                                                                                                                                55 Baker Street,W1, being Land Securities’ 50 Queen Anne’s Gate,
 1200000
                                                                                                                                                                                                SW1, where 304,720 sq ft completed all of which is let to Ministry
                                                                                                                            Prelet
                                                                                                                                                                                                of Justice.
  900000
                                                                                                                                                                                                Looking ahead to the rest of 2008, construction work is scheduled
 600000                                                                                                                                                                                         to complete on 2.78 million sq ft, 49% of which is still available.The
                                                                                                                                                                                                largest scheme scheduled to complete in the remainder of 2008 is
  300000
                                                                                                                                                                                                British Land’s development at Regent’s Place,W1. Other than this
                                                                                                                                                                                                there is the 167,000 sq ft scheme at Great Portland Estates 43-55
         0
                                                                                                                                                                                                Mortimer Street,W1, due to complete in Q4 2008, where an agent
                             06                     06                     06                  07                      07                   07                     07                      08
                    2
                           20
                                              3
                                                  20
                                                                    4
                                                                        20
                                                                                        1
                                                                                             20
                                                                                                             2
                                                                                                                  20
                                                                                                                                      3
                                                                                                                                          20
                                                                                                                                                          4
                                                                                                                                                              20
                                                                                                                                                                                     1
                                                                                                                                                                                         20     is yet to be appointed.
                   Q                     Q                       Q                   Q                   Q                       Q                    Q                          Q



Completed Space Actively Marketed                                                                                                                                                                Completions with Space Available
                   Space (sq ft)                                                                                                                                                                             Space (sq ft)
                                                                                                                                                                                                   1000000
  1200000                                                                                                                                                                                                                                                                                              To Complete

  1000000                                                                                                                                                                                           800000                                                                                             Still Available
                                                                                                    Complete
   800000                                                                                           Still Available                                                                                 600000
   600000
                                                                                                                                                                                                    400000                                                                                                                                                      Charlotte Building,W1:
   400000
                                                                                                                                                                                                                                                                                                                                                                37,000 sq ft scheme
                                                                                                                                                                                                    200000                                                                                                                                                      underway
   200000

                                                                                                                                                                                                         0
              0
                                                                                                                                                                                                                   08         08         08         08         09         09         09         09         10         10         10         10         11 011
                                06                     06                 06                07                   07                  07                07                     08                                 20         20         20         20         20         20         20         20         20         20         20         20         20    2
                           20                     20                  20                20                   20                  20                  20                     20                           Q
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                                                                                                                                                                                                                                                                                                     1
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                                                                                                                                                                                                                                                                                                                                                         3
                       2                      3                  4                  1                  2                     3                   4                      1
                   Q                     Q                      Q               Q                    Q                      Q                  Q                    Q


Investment
Investment sales in the West End saw 653,270 sq ft sold this quarter spread over a total of 21 deals. Despite the number of deals
completing being down on the 35% of this time last year, the volume of sq ft sold was up on both last quarter and this time last year.The
largest deal to complete was at 2 Kingdom Street,W2, when a 50% stake in the property was sold to Quinlan Private from Morley Fund
Management for £100 million. Elsewhere, the freehold at 14 Tothill Street, SW1, comprising of 58,910 sq ft, was purchased by German
fund manager Realis for £57.8 million.This was slightly lower than the asking price of £66 million and indicates the possibility that stock in
the West End may be overvalued.




For all data enquiries call 020 7911 1881                                                                                                                                                                                                                                                                                                                                           10
Midtown
                                                                                                   % +/-     % +/-                                               % +/-      Take Up
Take up (sq ft)                                                 Q1 2008                        24 months 12 months                                            3 months      Midtown saw poor levels of activity this quarter with
                                                                                                                                                                            only 27 deals completing, none of which were prelets,
 New/Refurb existing                                         27,692                               -4.92                            -56.06                      -78.49       and take up down by 60% on last quarter and 40% on
 Premarketing                                                     -                                 n/a                               n/a                         n/a       this time last year.The largest deal to take place was
 Secondhand                                                 184,946                              -40.41                            -37.13                      -38.44       the 21,230 sq ft letting at New Printing House Square,
                                                                                                                                                                            Gray’s Inn Road,WC1, where an undisclosed occupier
 Under Construction                                               -                             -100.00                               n/a                     -100.00       took part of the first floor.
 Total                                                      212,638                              -40.72                            -40.47                      -59.78
                                                                                    Take up for new or refurbished space is down
substantially, by 79% on last quarter. Only two deals of this grade completed totalling 27,690 sq ft, the largest at 322 High Holborn,WC1,
where 14,750 sq ft was let to Charter PLC. Take up of secondhand space was also severely down this quarter, dropping by 38% on Q4
2007 and 37% on this time last year.
Only 130,000 sq ft was placed under offer this quarter with the largest single unit being the 9,710 sq ft third floor at 1 Plough Place, EC4.

                                                                                                   % +/-      ft
                                                                                                           Sq % +/- Mkt Shr+/-
                                                                                                                         %                                                  Supply
Supply (sq ft)                                                  Q1 2008                        24 months 12 months 3 months                                                                                                                New Printing House Square,
                                                                                                                                                                            Supply for Midtown rose slightly, increasing by 7% on
                                                                                                                                                                            last quarter. This increase was largely due to the             WC1: 21,200 sq ft let
 New/Refurb existing                                          194,310                            -42.18                             -17.03                       1.91
                                                                                                                                                                            amount of space under construction coming on to the
 Premarketing                                                 315,224                            -67.29                             -62.44                     -35.38       market, rising by 18% on Q4 2007. The largest scheme
 Secondhand                                                 1,765,082                            -13.75                              27.81                      13.43       to get underway was the refurbishment at Holbrook
 Under Construction                                         1,308,725                             54.00                              66.77                      17.65       House, 14-18 Great Queen Street,WC2, where
                                                                                                                                                                            106,880 sq ft started, all of which is available, and is due
 Total                                                      3,583,341                            -14.60                              10.63                       7.06       for completion in Q3 this year.
Available secondhand stock has risen this quarter by 13% on Q4 2007 and 28% on this time last year.This increase is largely a result of
the 330,000 sq ft now available on a sublease from Sainsbury’s at 33 Holborn, EC1. New or refurbished stock rose slightly, by 2%, with
new additions to the market including 127-133 Charing Cross Road,WC2, where 23,630 sq ft is now available.
This quarter has seen a decrease in premarketed space, down by 35% on last quarter.This is a result of more space going under
construction, with figures up by 18% on Q4 2007.
A total of 100,000 sq ft was withdrawn from the market this quarter, including 59,380 sq ft at Halsbury House, 35 Chancery Lane,WC2,
where Lexis Nexis Europe remains in occupation.

Availability Rates                                                                                                                                              Availability Rates
                                                                                                                                                                Availability rates for Midtown continued to rise this quarter, and
          Availability Rate (%)
  12                                                                                                                                                            have been since Q2 2007.The rate now stands at 6.5%, up from the
                                                                                                                                                                5.75% of last quarter and the 5.29% seen this time last year.This
  10                                                                                                                                                            increase is a result of rising supply levels that were not absorbed by
      8
                                                                                                                                                                take up.

      6                                                                                                                                                         Like most markets this quarter, Midtown saw no take up of
                                                                                                                                                                premarketed space.With 770,000 sq ft due to complete in 2008 and
      4                                                                                                                                                         78% of this space still available, activity will need to improve if this
      2                                                                                                                                                         increase is going to slow and availability rates are to tighten again.

      0                                                                                                                                                         Asking Rents
                      06              06             06              07                07                 07              07                   08               Asking rents for new build stock plummeted by £19.08 per sq ft
                   20              20            20              20                20                 20                20                   20
               2               3             4               1                 2                  3                 4                    1
              Q            Q                Q               Q                 Q                  Q                 Q                    Q                       this quarter, and now stand at £47.25 per sq ft. This decline was
                                                                                                                                                                largely due to several properties on the market with low level             Ray House, EC4: Long
                                                                                                                                                                rents, including Arundel Great Court,WC2, where the quoting rent           leasehold sold for £220 million
Asking Rents                                                                                                                                                    on the 12,950 sq ft property is £29.38 per sq ft.
      £ (per sq ft)
 70                                                                                                                                                             Asking rents for secondhand space continued to rise and the
                                                                                                                                                                average now stands at £45.40 per sq ft, up from the £41.70 per sq
 60
                                                                                                                                                                ft seen last quarter. The average rent has been boosted by newly
 50                                                                                                                                                             available space coming on to the market, inlcuding at 33 Holborn,
 40                                                                                                                                                             EC1, where a quoting rent of £52.50 per sq ft has been released.
                                                                                                                                                                This has closed the gap between the average for new build and
 30
                                                                                                                                                                secondhand space, which is now showing the smallest difference
 20                        New Build (existing)                                                                                                                 since Q3 2006.
 10                        Secondhand

  0
                                                                                                                                                                Construction
                  0 6                 0 6              06               0 7                07                 07                    07                   08     Midtown saw only one scheme complete this quarter, at Schroder
               20                  20               20               20                 20                 20                    20                   20        Property Funds’ 32,000 sq ft 7 Dials Warehouse,WC2 which
           2                3                   4                1                 2                  3                      4                    1
          Q                Q                Q                   Q                 Q                  Q                  Q                     Q
                                                                                                                                                                Expedia.com took on a prelet last quarter.
Construction got underway on three schemes totalling 136,400 sq ft. The largest scheme to begin, other than the previously mentioned
Holbrook House, was Bedford Estates 22,530 sq ft development at Bloomsbury House, 74-77 Great Russell Street,WC1, where the
entire building remains available.

Investment
The Midtown investment market was very quiet this quarter with only seven sales completing.The largest single transaction to complete
was the sale of the Metropole Building, Northumberland Avenue,WC2, where the freehold was purchased by Istithmar, the Dubai
investment fund, for £130 million.




11                                                                                                                                                                                                            For all data enquiries call 020 7911 1881
                                                                                                                                                           London Offices Market Analysis
Docklands
                                                                                           % +/-     % +/-                                   % +/-        Take Up
Take up (sq ft)                                              Q1 2008                   24 months 12 months                                3 months         Docklands was one of only three markets that saw
                                                                                                                                                           take up figures rise this quarter, which were up by
 New/Refurb existing                                           -                       -100.00                          -100.00           -100.00          488% on last quarter, and by 517% on this time last
 Premarketing                                                  -                       -100.00                              n/a               n/a          year.The sole reason for this improvement was in the
 Secondhand                                              328,373                       2071.35                           596.61            518.29          amount of secondhand stock taken, rising by 518% on
                                                                                                                                                           last quarter.The largest deal to take place was at One
 Under Construction                                            -                           n/a                              n/a               n/a          Canada Square, where Moody’s Investors Services took
 Total                                                   328,373                        -29.51                           516.54            488.47          164,930 sq ft on a new lease at £45.50 per sq ft.
                                                                                                                                                           Elsewhere De Vere & Company took 33,250 sq ft at 1
Westferry Circus, spread over part of the ground and first floors. No deals                                                                         of any other grade of space completed.
Very little space went under offer this quarter, a total of only 50,000 sq ft.The largest unit to go under offer was at 10 Upper Bank Street,
where the 27,000 sq ft 16th floor has gained interest.

Supply
Supply for the Docklands dropped slightly this quarter falling by 2% on last quarter but up by 9% on this time last year.This decline was a
                                                                                                                                                                                                                    10 Upper Bank Street, E14:
result of a fall in the availability of all building grades, with the exception of space under construction which rose by 16%. New additions                                                                        27,000 sq ft under offer
                                                                                          to this grade include the 375,000 sq ft 25 Churchill
                                                     % +/-          ft
                                                                Sq % +/- Mkt Shr+/-
                                                                               %          Place, which went under construction in January. Supply
 Supply (sq ft)                  Q1 2008 24 months 12 months 3 months                     of premarketed space fell this quarter by 10% and this
                                                                                          was solely due to the increase in the volume of space
  New/Refurb existing               29,327        -95.85       -91.42        -0.34        under construction and not a result of take up.
  Premarketing                  4,362,636         -44.38       -30.82       -10.06        Supply of secondhand stock also fell this quarter and
  Secondhand                       719,996        -36.45       -18.41       -14.12        was down by 14% on Q4 2007 and 18% on this time
  Under Construction            3,063,405 39684.48                 n/a       16.30        last year.This was due to the huge increase in the
                                                                                          amount of space taken this quarter.
  Total                         8,175,364         -15.64         8.57        -2.12
                                                                                          Withdrawn figures for Docklands remained at a
relatively low level this quarter with 54,910 sq ft being taken off of the market. At 1 Canada Square, 28,000 sq ft was withdrawn from the
market on the 24th floor, with current tenant State Street Bank and Trust Company planning to remain in occupation. Also at this
property, 24,950 sq ft on part of the 19th floor was withdrawn.

Availability Rates                                                                                                                          Availability Rates
                                                                                                                                            Availability rates continued to tighten this quarter, as a result of
       Availability Rate (%)                                                                                                                greatly improved take up and limited supply levels, and now stand at
  12
                                                                                                                                            4.46%, down from the 5.06% of Q4 2007 and 6.87% of this time
  10                                                                                                                                        last year.The outlook for the remainder of 2008 seems to be one
                                                                                                                                            of stability with 490,000 sq ft set to complete, 74% of which has
   8                                                                                                                                        already been prelet.
   6
                                                                                                                                            Asking Rents
   4                                                                                                                                        Average asking rents for new build stock dropped this quarter
   2                                                                                                                                        falling to £37.25 per sq ft.This is down from the £39 per sq ft seen
                                                                                                                                            last quarter but up on the £34.25 seen in Q3 2007.This low value
   0                                                                                                                                        is largely due to only two properties currently quoting rents.
                   06                06            06             07             07               07               07              08
                 20             20             20             20             20                 20             20              20
        Q
             2
                        Q
                            3
                                          Q
                                           4
                                                         Q
                                                          1
                                                                        Q
                                                                         2
                                                                                        Q
                                                                                         3
                                                                                                          Q
                                                                                                           4
                                                                                                                          Q
                                                                                                                           1                Asking rents for secondhand stock continued to rise this quarter
                                                                                                                                            with the average price per sq ft now standing at £29.24 per sq ft,
                                                                                                                                            up from the £28.32 per sq ft last quarter.This rise was contributed     20 Churchill Place, E14:
Asking Rents                                                                                                                                to by an asking price of £49.50 per sq ft being released at 1           363,000 sq ft due to
       £ (per sq ft)                                                                                                                        Churchill Place and £47.50 per sq ft being released at 10 Upper         complete Q4 2008
 45                                                                                                                                         Bank Street.
 40
 35                                                                                                                                         Construction
 30                                                                                                                                         Only two schemes went under construction this quarter totalling
 25                                                                                                                                         379,730 sq ft.The only scheme other than the 375,000 sq ft 25
 20                                                                                                                                         Churchill Place to get under way was Oracle Estate’s 4,700 sq ft
 15                                                                                                                                         Canary Quarter, 20 Millharbour.
                        New Build (existing)
 10
                        Secondhand                                                                                                          Docklands again saw no schemes complete this quarter.The
  5
                                                                                                                                            remainder of 2008 is set to see 490,000 sq ft spread across four
  0
                                                                                                                                            properties complete, the largest of which is Prudential’s 363,280 sq
                 06               06                06             07             07                 07              07              08
             20                 20                20             20             20              20                 20              20       ft 20 Churchill Place, all of which is prelet and is due to complete
         2               3                    4              1              2               3                  4               1
       Q                Q                 Q              Q              Q               Q                     Q            Q
                                                                                                                                            in Q4 2008.

Investment
Docklands saw no investment sales take place this quarter and little interest shown as no investment opportunities were placed under
offer.This may be a sign that investor confidence is at a low and that banks are more reluctant to lend the finances for purchases.There
are also very few investment opportunities available in the current market with freeholders worried that asking prices are unlikely to be
met and thus deciding to hold on to their assets until conditions pick up.The largest availability is at Arrowhead, 6 Marsh Wall, where the
property is available to let or purchase from Ballymore Properties.




For all data enquiries call 020 7911 1881                                                                                                                                                                                                12
City Fringe
                                                                                                  % +/-     % +/-                                         % +/-        Take Up
Take up (sq ft)                                                 Q1 2008                       24 months 12 months                                      3 months      Take up for the City fringe rose this quarter by 26% on
                                                                                                                                                                     last quarter and 82% on Q1 2007.This increase was
 New/Refurb existing                                        182,615                            297.24                            298.76                239.12        due to 182,620 sq ft of new or refurbished stock being
 Premarketing                                                     -                               n/a                               n/a                    n/a       let, up 239% on last quarter.The largest deal to take
 Secondhand                                                 267,703                            139.11                             33.09                 -11.87       place, and the sole reason for this increase, was at
                                                                                                                                                                     Milton Gate, Chiswell Street, EC1, where 171,800 sq ft
 Under Construction                                               -                               n/a                               n/a                    n/a       was taken by Addleshaw Goddard.The 25,070 sq ft fifth
 Total                                                      450,318                            185.14                             82.36                  25.92       floor was also taken but was immediately leased back
                                                                                                                                                                     to freeholder UBS for a term of 3-5 years. Only three
other deals completed for this grade of space, all at The Wool                                                                                     House, 74 Back Church Lane, E1.
Take up of secondhand stock dropped this quarter by 12% on Q4 2007, but was up by 33% on this time last year.The largest deal to go
through was the 45,400 sq ft letting to an undisclosed occupier at Old Truman Brewery, Brick Lane, E1.
This quarter saw 117,670 sq ft go under offer, with the largest deal in the pipeline being the 27,890 sq ft on the 8th floor at 1-10 Bishops
Square, E1.
                                                                                                                                                                                                                                     Apollo Court, E1: Global
                                                                                                  % +/-   Sq % +/- Mkt Shr+/-
                                                                                                             ft         %                                              Supply                                                        Tea & Commodities takes
                                                                                                                                                                       Overall, supply levels in the City fringe fell in Q1 2008,    35,400 sq ft
Supply (sq ft)                                                  Q1 2008                       24 months 12 months 3 months
                                                                                                                                                                       down by 5% on last quarter.The largest decrease was
 New/Refurb existing                                          344,111                          -49.42                             -6.47                 -28.74         seen for new or refurbished existing stock, declining by
                                                                                                                                                                       29% on last quarter and 6% on this time last year, as a
 Premarketing                                               2,194,049                          161.98                             99.45                  -3.16
                                                                                                                                                                       result of successful take up. Supply of premarketed space
 Secondhand                                                 1,611,289                          -42.39                            -31.21                  -4.72         fell by 3% on Q4 2007.This was not a result of improved
 Under Construction                                           340,461                           20.09                            -35.07                  25.36         take up as no prelets signed this quarter, but due to four
 Total                                                      4,489,910                           -2.35                              3.58                  -4.70         schemes completing this quarter, the largest being the
                                                                                                                                                                       8,990 sq ft Denim Factory, Davenant Street, E1.
Supply of secondhand stock also decreased this quarter and was down by 5% on last quarter and 31% on this time last year. Once again
this was not a result of improved take up for the quarter, but due to space being withdrawn from the market.
Space under construction increased this quarter rising by 25% on Q4 2007 as eight schemes got underway, the largest of which is the
48,440 sq ft development at ISG InteriorExterior’s Nido Spitalfields, 100 Middlesex Street, E1.
A total of 53,760 sq ft was withdrawn from the market this quarter, the most notable of which was at Lincoln Place, 50 Farringdon Road,
EC1, where Merrill Lynch decided to remain in occupation of the entire 32,000 sq ft building.

Availability Rates                                                                                                                                        Availability Rates
                                                                                                                                                          Availability rates for the City fringe continued to tighten very
      Availability Rate (%)
 18                                                                                                                                                       slightly this quarter as a result of improved take up activity and a
 16                                                                                                                                                       reduced level of supply.The current rate stands at 9.30% down
 14                                                                                                                                                       from the 10.17% seen last quarter.The rate is however, still the
 12                                                                                                                                                       highest across all markets despite the largest letting of the quarter
 10                                                                                                                                                       taking place in this market.With 342,000 sq ft of speculative space
  8
                                                                                                                                                          due to complete this year, preletting activity will have to start if the
  6
                                                                                                                                                          availability rate is to remain in single figures.
  4
  2
                                                                                                                                                          Asking Rents
  0
                                                                                                                                                          Asking rents continued to rise for both new build and secondhand
                   0  6              0 6           0    6           0    7           0    7               0 7           0 7               0 8             stock this quarter. New build stock saw an average increase of
                20                20            20               20               20                   20            20                20                                                                                            75 Farringdon Road, EC1:
       Q
            2
                          Q
                              3
                                           Q
                                            4
                                                            Q
                                                             1
                                                                             Q
                                                                              2
                                                                                               Q
                                                                                                3
                                                                                                                Q
                                                                                                                 4
                                                                                                                                  Q
                                                                                                                                   1                      £1.75 per sq ft to £49.00 per sq ft. A new quoting rent was
                                                                                                                                                                                                                                     Freehold sells for £9 million
                                                                                                                                                          released at 1-10 Bishops Square, E1, rising by £2.50 per sq ft to
                                                                                                                                                          £57.50 per sq ft for the 64,000 sq ft available.
Asking Rents
                                                                                                                                                          Secondhand space has seen an increase of £2.35 per sq ft on last
      £ (per sq ft)
 70                                                                                                                                                       quarter, rising to £32.69, with new quoting rents being released at
                                                                                                                                                          several properties. One increase was seen at a property quoting a
 60                       New Build (existing)
                                                                                                                                                          particularly low rent at 18A Ensign Street, E1, increasing from
 50                       Secondhand                                                                                                                      £11.62 per sq ft to £19.50 per sq ft.
 40
                                                                                                                                                          Construction
 30
                                                                                                                                                          Work commenced on a total of 132,480 sq ft this quarter spread
 20                                                                                                                                                       across eight schemes including Nido Spitalfields, E1.The largest of
 10
                                                                                                                                                          the four schemes to complete this quarter, other than the Denim
                                                                                                                                                          Factory, E1, was the 8,290 sq ft South Stable Building, 138 Kingsland
  0
                                                                                                                                                          Road, E2, where an agent is yet to be appointed.
                 06                 06               06               07               07                 07                07                08
            20                    20               20               20               20                20                20                20
        2                  3                   4                1                2                 3                 4                 1
      Q                   Q                Q                Q                Q                 Q                    Q              Q
                                                                                                                                                          Investment
                                                                      Investment activity in the City fringe has been extremely lacklustre
with only two deals completing, the largest of which was the £9 million sale of the freehold at 75 Farringdon Road, EC1. Elsewhere the
long leasehold at 136 Old Street, EC1, sold for £470,000 to owner occupier Trouble Free I.T.




13                                                                                                                                                                                                      For all data enquiries call 020 7911 1881
                                                                                                                                                                                 London Offices Market Analysis
Southern Fringe
                                                                                                        % +/-     % +/-                                              % +/-      Take Up
Take up (sq ft)                                                    Q1 2008                          24 months 12 months
                                                                                   Take up for the Southern fringe declined by 23% on                             3 months
                                                                                   last quarter and 52% on this time last year with only
  New/Refurb existing              -          n/a     -100.00       -100.00        four deals completing in total. No deals of premarketed
  Premarketing                     -          n/a          n/a           n/a       or new or refurbished stock took place this quarter.
  Secondhand                  44,992         5.34       -67.79       -61.00        Take up of secondhand stock also declined this quarter
                                                                                   by 61% on last quarter and 68% on this time last year.
  Under Construction          50,947        -8.17          n/a           n/a       The largest deal to complete was the 25,480 sq ft
  Total                       95,939        -2.29      -52.44        -22.99        letting at New City Court, 20 St Thomas Street, where
                                                                                   Guy's and St Thomas' NHS Foundation Trust took the
space. Elsewhere, 4,000 sq ft was taken by Planning Potential Limited at Magdalen House, 136-148 Tooley Street.
A total of 50,950 sq ft of space under construction was taken this quarter, with just one deal completing at 30 Park Street, where Hyde
Housing Association took the entire proposed property on a 20 year lease at £42.50 per sq ft.The tenant plans to take occupation later
this year, when the building is due to complete.
Only 24,970 sq ft was placed under offer this quarter, the majority of which was at New Kings Beam House, where 10,800 sq ft is under
offer in total.                                                                                                                                                                                                                             30 Park Street, SE1:
                                                                                                                                                                                                                                            Entire 51,000 sq ft prelet
Supply                                                                                                                                                                                                                                      to Hyde Housing Association
Supply levels for the Southern fringe fell slightly this quarter by 3% on last quarter and down by 31% on Q1 2007. Available secondhand
stock increased to 478,610 sq ft and included an addition at Harling House, 47-51 Great Suffolk Street, where 13,870 sq ft is now
                                                                                       available. Supply of premarketed space has remained
                                                 % +/-          ft
                                                             Sq % +/- Mkt Shr+/-
                                                                           %           the same as last quarter and is down by 13% on this
 Supply (sq ft)              Q1 2008 24 months 12 months 3 months                      time last year. New or refurbished stock declined this
                                                                                       quarter by 19% and space under construction declined
  New/Refurb existing          27,606         -87.33        -87.84      -18.71         by 100% due to the letting at 30 Park Street.
  Premarketing                793,954         -39.91        -12.92        0.00         Only 9,450 sq ft was withdrawn from the market this
  Secondhand                  478,608          46.47        128.74        3.28         quarter, spread over three properties, the largest being
  Under Construction                 -      -100.00        -100.00     -100.00         the withdrawal of the basement floor at New Kings
                                                                                       Beam House. Elsewhere the first and second floors
  Total                     1,300,168         -48.03        -31.29       -3.14
                                                                                       were withdrawn at 201 Tooley Street.

                                                                                                                                                                    Availability Rates
Availability Rates                                                                                                                                                  Availability rates for the Southern fringe increased again this
      Availability Rate (%)
                                                                                                                                                                    quarter, but at a lower rate than Q4 2007, and now stand at
  8                                                                                                                                                                 4.91%.This was again due to declining take up for the quarter and
  7                                                                                                                                                                 although supply levels also dropped, it was not enough to prevent
  6
                                                                                                                                                                    the rate from slackening.With 236,550 sq ft due to complete this
                                                                                                                                                                    year and no space still available the outlook for the Southern fringe
  5
                                                                                                                                                                    market appears to be relatively stable.
  4

  3                                                                                                                                                                 Asking Rents
  2                                                                                                                                                                 Asking rents for both new build and secondhand stock continued
  1                                                                                                                                                                 to rise this quarter but again the rate of increase has been
  0                                                                                                                                                                 subdued. New build stock now has an average quoting rent of
                   06              06               06                 07                 07                  07               07                   08              £48.25 per sq ft up from the £47.50 per sq ft seen last quarter and
               20              20               20                 20                 20                  20                 20                   20
          Q
           2
                          Q
                           3
                                           Q
                                            4
                                                              Q
                                                               1
                                                                                 Q
                                                                                  2
                                                                                                     Q
                                                                                                      3
                                                                                                                        Q
                                                                                                                         4
                                                                                                                                             Q
                                                                                                                                              1                     average rents for secondhand space increased slightly from the
                                                                                                                                                                    £33.50 per sq ft to £33.69 per sq ft. A new rent for secondhand
                                                                                                                                                                    stock was released at Sea Containers House where the fifth floor        160 Tooley Street, SE1:
                                                                                                                                                                    south unit came on to the market and is now available at a quoting      185,600 sq ft due to
Asking Rents                                                                                                                                                        rent of £35 per sq ft.                                                  complete next quarter

          £ (per sq ft)
  70                                                                                                                                                                Construction
  60                          New Build (existing)                                                                                                                  It has again been an extremely quiet quarter for the Southern
  50                          Secondhand
                                                                                                                                                                    fringe in terms of construction.There have been no new starts this
                                                                                                                                                                    quarter and no properties have completed.The pipeline for the
  40                                                                                                                                                                remainder of 2008 remains quite quiet, with 236,550 sq ft due to
  30                                                                                                                                                                complete spread over two properties. Both schemes have already
                                                                                                                                                                    been fully prelet, the largest of which is, 30 Park Street.The
  20
                                                                                                                                                                    remaining proposed property, 160 Tooley Street, is estimated to
  10                                                                                                                                                                include 185,600 sq ft upon completion and has been entirely prelet
      0                                                                                                                                                             to the London Borough of Southwark. Only one start is scheduled
                     06               06                 06                 07                 07                  07                   07                   08     for the remainder of the year and this is at Sellar Properties
                   20               20               20                 20                 20                  20                     20                   20
               2               3                 4                  1                  2                   3                      4                    1            580,000 sq ft Shard of Glass development, which saw demolition
          Q                   Q                 Q                  Q                  Q                   Q                  Q                    Q
                                                                                                                                                                    start on site this quarter.

Investment
Only four investment deals completed this quarter.The largest transaction to take place was the sale of the freehold at the currently
under construction 160 Tooley Street, from UBS Global Asset Management to a private investor for £135 million. Elsewhere stakes in the
Shard of Glass and New London Bridge House were purchased by Qatari consortium, Zijaj for £30 million.




For all data enquiries call 020 7911 1881                                                                                                                                                                                                                       14
What London Offices monitors
Markets
City Core: EC1A, EC2M, EC2N, EC2R, EC2Y, EC2V, EC2A (only Finsbury Pavement, Finsbury Square, Appold Street and
Chiswell Street), EC3, EC4 (excluding EC4A & EC4Y)
City Fringe: EC1M, EC1N (excluding postcode sector 2), EC1R, EC1V, EC1Y, EC2A (excluding Finsbury Pavement,
Finsbury Square, Appold Street and Chiswell Street), E1
Southern Fringe: SE1 postcode sectors, 0, 1, 2 & 9
Docklands: E14
Midtown: EC4A & EC4Y, EC1N (postcode sector 2),WC1,WC2 (excluding Leicester Square)
West End:W1, SW1, NW1 sectors 2 (Euston Road only), 3, 5 & 6, Leicester Square (WC2) and W2 sectors 1 & 6

Additional Markets
South Central: Remainder of SE1 and SE11
North Central: Remainder of NW1 and N1
West Central: Remainder of W2,W6,W8,W14, SW3, SW5, SW6, SW7 & SW10

Data
Building Stock: Any office building over 93 sq m (1,000 sq ft) in City Core,West End, Midtown, Docklands, City Fringe
and Southern Fringe and over 465 sq m (5,000 sq ft) in North Central,West Central and South Central
Availability: Any unit above 93 sq m (1,000 sq ft) in buildings subject to the above stock thresholds
Take up: Any unit above 232 sq m (2,500 sq ft) subject to stock thresholds
Planning: Any project over 232 sq m (2,500 sq ft) subject to stock thresholds


www.egi.co.uk

EGi London Offices
Estates Gazette Group
1 Procter Street
London
WC1V 6EU
020 7911 1881




15                                                                                                      For all data enquiries call 020 7911 1881
                                                                          London Offices Market Analysis
Definitions
  Quarters: For data collation reasons, our quarters run from the 1st of the month to the last day of the 3rd month i.e.
  1st January to 31st March; 1st April to 30th June; 1st July to 30th September and 1st of October to 31st December.
  Some data in this report is given in half years for space reasons.

  Agency League Tables: The total space disposed by each agent adds up to more than total take-up.This is because
  space in joint agency deals has been attributed to all agents involved.The market share is each agent’s share of take-up,
  not the total of all agents.The tables include all completed deals over 93 sq m (1,000 sq ft) within our boundaries (see
  map) including prelets and excluding space under offer, lease renewals, restructures or investment sales.

  Availability Rates: Total building stock figures divided by vacant space which is actively being marketed. Neither
  figures include space under construction or yet to commence construction.

  Availability: New/Refurb (existing) is a combined total of newly constructed and refurbished space; Premarketing is
  any space marketed which is yet to commence construction; Secondhand is any space which has previously been
  occupied; Under Construction is a combined total of refurbishment and redevelopment projects currently under
  construction. Space under offer is included. Investment properties are not included.

  Take Up: See criteria and definitions above.

  Average Asking Prices: An average of asking prices by grade of space by market. Only space available on new leases
  with a quoting rent is collated. Space under offer has been included. Please note that Secondhand Grade A space is
  previously occupied units with air conditioning and one or more of raised floors, under floor trunking or perimeter
  trunking.

  Investment Sales: Subject to stock thresholds, a total of space sold as freehold, long leasehold or virtual freehold,
  both for investment and for owner occupation.

  Construction Starts with Prelets: A total of space commencing refurbishment or redevelopment by quarter with a
  total of that space prelet.This includes space not on the market.

  Completed Space Actively Marketed: Simply a total of completed refurbishments and redevelopments being
  actively marketed by quarter. Includes space let but never occupied.

  Completions with Space Available: A total of all office space currently under construction by completion date with
  how much is still available.This includes space not on the market.




For all data enquiries call 020 7911 1881                                                                                     16
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17 For all data enquiries call 020 7911 1881                                                     For all data enquiries call 020 7911 1881
London Office Database
Contacts
Hannah Gardiner
Team Manager – London Research
Estates Gazette Group
1 Procter Street
London
WC1V 6EU
Tel: 020 7911 1881
hannah.gardiner@egi.co.uk

Andy Heard
Researcher – London Offices
Tel: 020 7911 1889

LO Sales and Subscriptions
Daniel Clements
Sales Manager
Tel: 020 7911 1773
daniel.clements@egi.co.uk




                                 This report is published for general information only. Although high
                                 standards have been used in the preparation of the information, analysis,
                                 views and projections presented in this report, no legal responsibility can
                                 be accepted by London Offices or EGi for any loss or damage resultant
                                 from the contents of this document. As a general report, this document
                                 does not necessarily represent the view of EGi in relation of particular
                                 properties or projects. Reproduction of this report in whole or in part is
                                 allowed with proper reference to EGi’s London Offices.

								
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