After The Gold Rush?

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1 THIS IS A SUMMARY OF THE 2015 INVESTMENT REVIEW # THE FULL VERSION IS ONLY AVAILABLE TO COSTAR SUITE CLIENTS. please contact us on or sales@costar.co.uk After The Gold Rush? Another bumper year of investment, but sharp slowdown in H2 suggests a more challenging 2016 UK Commercial Property 1

2 CoStar Group THIS IS A SUMMARY OF THE Table of Contents 2015 INVESTMENT REVIEW Overview... 3 # Major Events... 4 Key Investment Deals in Data Highlights Regional Renaissance Continued in Overseas Investors Find Value Outside London THE FULL VERSION IS ONLY AVAILABLE TO COSTAR SUITE CLIENTS. please contact us on or sales@costar.co.uk Pace of Yield Compression Slowed in in Review: Key Themes & Drivers Outlook: After the Gold Rush - What Next?...18 Agent League Tables: Q Agent League Tables: 2015 Annual Data, Analytics & News Have Come Together Get in Touch with CoStar within this report. The publisher cannot accept liability for any loss/damage which may arise as a result of any error or omission of any data. Any data reproduced from this analysis must be accredited to CoStar. 2

3 Overview Richard Yorke Director of Analytics How was 2015 for you? According to our data it was probably a good year to be an investor, lender, broker or developer of real estate. Total CRE investment was a buoyant 67.5bn. This made it the second strongest year on record and 46% above the 10-year average. Unsurprisingly London, probably the largest and most liquid CRE market in the world, acted as a magnet for global investment. However, total investment in London was lower than in 2014, reflecting increasingly tight yields and buyers and sellers being unable to agree prices on several big deals towards the end of the year. It was investment activity in the UK s Big Six and other regional cities which caught the eye in Office investment in the Big Six regional cities increased 16% to 3.2bn, more than double the eight-year average, with foreign investors an increasing presence outside of London. Overall foreign investment into the UK totalled a record 27.8bn in 2015, a 6% increase Y-o-Y. Demand for alternative assets such as hotels and student accommodation rose strongly in Although office remained the most dominant sector overall, investment into all three main CRE types offices, retail, and industrial declined. Retail in particular remains highly polarised between the best and the rest. Despite the big headline investment number, our data revealed a marked loss of momentum in the second half of the year, with investment down 19% compared to H There are a number of probable explanations, not least the fact that the very high levels of activity in London was always going to be hard to maintain in the face of racy pricing. However, increasing global economic and political uncertainty is probably impacting investment. This begs the questions: will recent stock market volatility, worries about China s economy, weak commodity prices, and uncertainty about the UK s place in the EU mean that investment will ebb in 2016? Or will the UK s size, liquidity and relatively strong economic and occupier fundamentals continue to pull in vast levels of footloose global capital? Whatever the outcome, 2016 is set to be a very interesting year. Key Figures 67.5bn invested in UK commercial property in bn 32% down 5% from 2014 invested in the second half of the year a drop of 19% Y-o-Y rise in North East investment The highest increase of any region A combined 9.8bnspent on hotels and student accommodation up 77% on % rise in investment from the Far East 3

4 CoStar Group Q League Tables: Investment Agents There is something in the water at JLL in the fourth quarter of the year it seems. It was a bumper Q4 sales-wise in 2015, as it was in 2014, with the agent this time around advising on 2.5bn of disposals, significantly ahead of Eastdil Secured, Cushman & Wakefield and CBRE, who occupied the remaining top four spots. And JLL was at it again in the acquisitions charts, chalking up top spot with 1.1bn of advisory work, this time just pipping Cushman & Wakefield, Savills and Knight Frank at the top of the table. A special mention must go to Cushman & Wakefield, which really pushed up the tables following its merger with DTZ. N.B. DTZ and Cushman & Wakefield merged on 1st September. All deals completed by the legacy DTZ business between 1st October 31st December are included for Cushman & Wakefield. Investment Agents - Vendor Investment Agents - Acquisition Rank Q (Q3 2015) Vendor Agent Value m Rank Q (Q3 2015) Acquisition Agent Value m 1 (1) JLL 2,514 2 (4) Eastdil Secured 1,866 3 (7) Cushman & Wakefield 1,736 4 (2) CBRE 1,666 5 (5) Savills 1,632 6 (3) Knight Frank 1,073 7 (8) GM Real Estate (10) Allsop (6) Colliers International (-) Lambert Smith Hampton (15) Michael Elliott (-) Bilfinger GVA (9) Strutt & Parker (-) BNP Paribas Real Estate UK (-) Tudor Toone (2) JLL 1,141 2 (5) Cushman & Wakefield 1,120 3 (4) Savills (10) Knight Frank (11) Colliers International (1) CBRE (13) GM Real Estate (9) Capital Real Estate Partners (15) Allsop (-) Gerald Eve (-) Deloitte Real Estate (-) Lunson Mitchenall (8) Morgan Williams (-) Lambert Smith Hampton (6) Strutt & Parker % of Q s top 15 Acquisition agents* subscribe to Propex. 80% of Q s top 15 Vendor agents* subscribe to Propex. *Includes single and multi-branch agencies 20

5 Q League Tables: Single Branch Agents Single branch wise there were spectacular performances in Q4 again, with GM Real Estate the standout, advising on a combined 1.29bn of deals to take the number two spot for sales and number one spot for acquisitions. Other stellar performances came from Michael Elliott, Tudor Toone, Dowley Turner Real Estate, Lunson Mitchenall and Morgan Williams. Single Branch Agents - Vendor Single Branch Agents - Acquisition Rank Q (Q3 2015) Vendor Agent Value m Rank Q (Q3 2015) Acquisition Agent Value m 1 (1) Eastdil Secured 1,866 2 (2) GM Real Estate (5) Michael Elliott (6) Tudor Toone (-) Dowley Turner Real Estate (9) Morgan Williams (-) Kitchen La Frenais Morgan (7) Wilkinson Williams (-) CWM (-) Whitmarsh Holt Young (-) Capital Real Estate Partners 93 =12 (4) Levy Real Estate 70 =12 (-) Hall Kemp (-) Crossland Otter Hunt (-) Gavin Black & Partners 45 1 (3) GM Real Estate (2) Capital Real Estate Partners (11) Lunson Mitchenall (-) Morgan Williams (-) Lewis Ellis (-) CWM (-) Harper Dennis Hobbs (-) Hall Kemp (4) Michael Elliott (7) Dowley Turner Real Estate (-) Wilkinson Williams (-) Joiner Cummings (-) GCW (-) Sheridan Property Consultants (-) WHR Property Consultants 83 To find out more about CoStar Propex visit 21

6 CoStar Group 2015 Annual League Tables: Investment Agents Over the course of the whole year the big two jostled for the top spots. CBRE won the title for sales, advising on a spectacular 9bn with standout deals including the sale of the Bath Road campus in Slough for Segro right at the end of the year. JLL was top dog for acquisitions, advising on 4.71bn aided by its roles on major deals such as the acquisition of 22 Bishopsgate for Temasek/AXA for 300m and the acquisition of MediaCity UK in Salford for Legal & General for 251.5m. Savills took the third spot for both sales and acquisitions, while Knight Frank, Colliers International, Strutt & Parker and Allsop will be among those feeling highly pleased with last year s efforts. N.B. DTZ and Cushman & Wakefield merged on 1st September. DTZ s figures in the tables below reflect deals completed by the business up until this date. Any deals completed from 1st September 31st December are included for Cushman & Wakefield. Investment Agents - Vendor Investment Agents - Acquisition Rank 2015 (2014) Vendor Agent Value m Rank 2015 (2014) Acquisition Agent Value m 1 (2) CBRE 9,042 2 (1) JLL 8,993 3 (3) Savills 5,049 4 (5) Knight Frank 4,688 5 (11) Eastdil Secured 4,561 6 (9) Cushman & Wakefield 2,880 7 (8) Colliers International 2,559 8 (4) GM Real Estate 1,930 9 (14) Allsop 1, (13) Bilfinger GVA 1, (12) Strutt & Parker 1, (-) Michael Elliott (6) DTZ (-) Morgan Williams (15) BNP Paribas Real Estate UK (3) JLL 4,711 2 (1) CBRE 4,329 3 (2) Savills 3,776 4 (5) Cushman & Wakefield 3,334 5 (6) Knight Frank 3,149 6 (8) Colliers International 2,436 7 (7) Strutt & Parker 1,956 8 (4) DTZ 1,479 9 (-) Morgan Williams 1, (9) BNP Paribas Real Estate UK 1, (10) GM Real Estate 1, (-) Doherty Baines 1, (-) Michael Elliott 1, (-) Allsop 1, (-) Capital Real Estate Partners % of 2015 s top 15 Acquisition agents* subscribe to Propex. 80% of 2015 s top 15 Vendor agents* subscribe to Propex. *Includes single and multi-branch agencies To find out more about CoStar Propex visit 22

7 2015 Annual League Tables: Single Branch Agents Among the single branch agents, the superstar performers at Eastdil Securities, GM Real Estate and Michael Elliott once again stood out, but there were tremendous results from Morgan Williams (first for acquisitions and fourth for sales), Tudor Toone, Capital Real Estate Partners, Dowley Turner Real Estate and Doherty Baines, among others. Single Branch Agents - Vendor Single Branch Agents - Acquisition Rank 2015 (2014) Vendor Agent Value m Rank 2015 (2014) Acquisition Agent Value m 1 (3) Eastdil Secured 4,561 2 (1) GM Real Estate 1,930 3 (7) Michael Elliott (4) Morgan Williams (6) Tudor Toone (2) Capital Real Estate Partners (5) Dowley Turner Real Estate (-) Harvey Spack Field (-) Wilkinson Williams (-) Cortex Partners (-) Kitchen La Frenais Morgan (8) Doherty Baines (-) Kieran D. Cotter & Co (-) Levy Real Estate (-) Fineman Ross (10) Morgan Williams 1,455 2 (1) GM Real Estate 1,311 3 (15) Doherty Baines 1,137 4 (7) Michael Elliott 1,028 5 (-) Capital Real Estate Partners (5) Dowley Turner Real Estate (4) Tudor Toone (2) Lunson Mitchenall (-) CWM (-) Everton Phillips (6) Lewis Ellis (-) Coady Supple (-) Fawcett Mead (8) Wilkinson Williams (-) Joiner Cummings UK CRE INVESTMENT REVIEW Watch industry leaders from across the UK discuss the changing dynamic and potential outlook for the Commercial Real Estate Market as we move into 2016 WATCH THE EXCLUSIVE INTERVIEWS HERE youtube.com/costaruk 23

8 Are you missing something? THE FULL INVESTMENT REVIEW CONTAINS: Breakdown of CRE investment by sector and region Data on capital inflows by country A view of yield movements by sector A special feature on the key themes and drivers during 2015 An outlook for 2016 The full report is available to CoStar Suite clients only, to find out how to become a client, contact us on or helpdesk@costar.co.uk

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10 Data, Analytics and News Have Come Together Access a unique combination of Data, Analytics and News, offering the most comprehensive macro-to-micro explanation of the latest trends in the UK property market. CoStar s proprietary data, which underpins this report, is sourced directly from UK property agents, investors and other involved parties to accurately reflect the transactional market in real time. Typically 850+ investment deals are recorded each quarter, more than any other data source. The Analytics team then overlays top-down analysis of the UK market on this unique dataset, breaking down investment trends by sector, sub-sector, geography, lot size, investor type, and yield. Finally the News team adds perspective to the analysis by providing timely industry and market updates. Richard Yorke Director of Analytics T: E: ryorke@costar.co.uk Mark Stansfield Senior Real Estate Analyst T: E: mstansfield@costar.co.uk Marianne Fitzpatrick Real Estate Analyst T: E: mfitzpatrick@costar.co.uk Grant Lonsdale Real Estate Analyst T: E: glonsdale@costar.co.uk Paul Norman Editor, CoStar News T: E: pnorman@costar.co.uk James Wallace Finance Editor, CoStar News T: E: jwallace@costar.co.uk Chris Johns Investment Research Associate T: E: cjohns@costar.co.uk 3 Iain Smyth Investment Research Associate T: E: ismyth@costar.co.uk

11 CoStar Group Get in Touch with CoStar CoStar Group (Nasdaq: CSGP) is the leading provider of commercial real estate information, analytic and marketing services. Founded in 1987, CoStar conducts expansive on-going research to produce and maintain the largest and most comprehensive database of commercial real estate information. Our suite of online services enables clients to analyse, interpret and gain unmatched insight on commercial property values, market conditions and current availabilities. CoStar maintains offices throughout the U.S. and in Europe with a staff of approximately 2,000 worldwide, including the industry s largest professional research organisation. CoStar Suite sales@costar.co.uk London Glasgow Manchester Interested in sponsoring future publications? Contact Richard Goff on sales@costar.co.uk 4