Christina Sigliano Director of Programmes, CoreNet Global UK Chapter christina.sigliano@hok

1. Christina Sigliano Director of Programmes, CoreNet Global UK Chapter christina.sigliano@hok.com

2. Ann Lewis Research Analyst Drivers Jonas Nigel Grice Head of Occupier Advisory Drivers Jonas Paul Burgess Director, Head of London Leasing The British Land Company

3. LONDON CRANE SURVEY SEPTEMBER 2009

4. NIGEL GRICE - Occupier AgencyANN LEWIS - Research

5. 18 MONTHS AGO 37 new starts – 4.2 m sq ft Source : DJ Crane Survey

6. 6 MONTHS AGO 17 new starts – 1.1 m sq ft Source : DJ Crane Survey

7. TODAY 6 new starts – 160,000 sq ft Source : DJ Crane Survey

8. Latest construction starts 32,000 sq ft 49,000 sq ft 80,000 sq ft – all pre-let 12,000 sq ft 37,000 sq ft 30,000 sq ft

9. Only one new significant start 390,000 sq ft

10. Headlines – Q2 CITY WEST END Availability 10.2% 9.2% Take-up (Q1 & Q2) 0.6 m sq ft 1.2 m sq ft 2.0 m sq ft Take-up (2008) 3.0 m sq ft £42.50 sq ft £70.00 sq ft Prime Headline Rent Source: Drivers Jonas Research

11. Falling rents… Prime Rents – Fall from peak West End City -42% -36% Source: Drivers Jonas Research

12. Take-up at a record low Q1 2009 Take up lowest on record M sq ft Source: Drivers Jonas Research

13. Q2 better but not much M sq ft Q2 09 Source: Drivers Jonas Research

14. Construction has fallen 35% YR on YR Volume under construction M sq ft Source: Drivers Jonas Research

15. Speculative space fallen 33% Volume under construction M sq ft Available Let Source: Drivers Jonas Research

16. Forecast jobs growth % Change But weaker recovery Westminster City Lower job loses Source: Experian

17. London pipeline is much smaller than 90s M sq ft Completed Available u/c Let u/c Source: Drivers Jonas Research

18. Want 100,000 sq ft of new space? sq ft 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Source: Drivers Jonas Research

19. Want 100,000 sq ft of new space? sq ft 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 Source: Drivers Jonas Research

20. 220,000 sq ft 205,000 sq ft One New Change 20 Gracechurch 395,000 sq ft 442,000 sq ft St Botolphs Ropemaker Heron Tower 385,000 sq ft 440,000 sq ft 290,000 sq ft 370,000 sq ft 290,000 sq ft 200 Aldersgate Drapers Gardens The Walbrook Cannon Place Completed 2009 2010 2011 Want 200,000 sq ft?

21. So… • Construction is down…. but spec space remains high • Jobs growth is weak… but construction cycle is smaller • 2009 is the maximum point of pessimism

23. Structural demand: it’s coming! West End City Source: Drivers Jonas Research

24. London pipeline: tenant’s dilemma M sq ft Completed Let u/c Available u/c Source: Drivers Jonas Research

25. LONDON CRANE SURVEY SEPTEMBER 2009

26. CoreNet Breakfast Forum Current State of the London real estate industryTuesday 15 September 2009 Paul Burgess Head of London Leasing The British Land Company PLC www.britishland.com

27. British Land’s Office Portfolio: • - £3.563 BN* • - £2.394 BN* in the City • *Values as of March 2009

28. Office Outlook - Occupier Market London office vacancy 7.3% (long-term average 8.1%1) Development activity 48% less than early 90s across all London sub-markets2 Speculative development unviable and made worse by increasing tax burden Occupier market fragile with take-up on a rolling annual basis low Increased signs of activity within BL’s prime, modern and well located portfolio Increased viewings 210,000 sq ft of City lettings, 49% of Q1 total take-up Further 63,000 sq ft under offer London Vacancy1 Development Completions over Cycles2 1 Jones Lang LaSalle – based on last 20 yrs 2 PMA – 5 yr Rolling Annual from 1992-2008

29. Lease now while stocks last

30. City Lease Events (20,000 sq ft+)

31. Build it and they will come

32. Securing Income From High Quality Modern Buildings • 94% occupancy1 (90% pro forma for Ropemaker2) • 93% of vacant accommodation brand new Grade A space • 58% of recently completed developments let/under offer • New lettings achieved at average £48 psf for 17 yrs • Only 9% of rent subject to break/expiry over next 3 yrs • (compared to IPD 24%) • Valuers’ build in assumptions on breaks/expiry • Average ERV £39 psf • Average void of 32 months • Capex of £40 psf 1 Underlying occupancy rate including accommodation subject to asset management and under offer 2 PC achieved in May 2009 3 Office space only (excludes storage) 4 To first break 5 Valuers’ assumed combined letting void and tenant incentive package 6 Current estimated headline rent (excludes provision for tenants’ incentives) on space to let

33. Priorities for the Future Continually evolving, dynamic property portfolio Rigorous and analytical overlay to support core property skills Robust and flexible financial structure and balance sheet Sustainable dividend supported by long, strong income streams

34. City Office Demandknown requirements of 10,000 sq ft+, Q2 2009 Active Potential Additional non-geographically specific demand = 2.20 million sq ft Total: 1.45 million sq ft Total: 4.12 million sq ft

35. Big Bang to Credit Crunch

36. The seminal 20th Century development in London

37. Scenario 1 - Back to The Future

38. Scenario 2 - Back to Basics

39. Scenario 3 - Things have changed

40. Conundrums and Contradictions Sustainability and Operational Requirements Power Density

41. Ropemaker A new benchmark

42. ‘The modular design steps back at each level to reveal a series of enchanting gardens in the air. It is an accomplished example of a design approach which integrates energy efficiency, humane working conditions and technology to produce an alternative to the usual office block’ Gateway House Basingstoke Peter Murray - RIBA Guide to Modern British Architecture

43. Good Design Principles Adaptability Permeability Sustainability

50. The UK Chapter is grateful to its Annual Sponsors: