The Western Corridor Industrial and Warehouse Market Report. Autumn 2015

The Western Corridor Industrial and Warehouse Market Report Autumn 2015

Highlights: 2015 TAKE-UP 2.8 million sq ft of floorspace taken up in Western Corridor. 19% on 2014 SUPPLY Q2 2014 6% up on half-year average over last 5 years. 31% of floorspace taken up was Grade A quality space. 1.5 million sq ft taken up in West London. 1.3 million sq ft taken up in Thames Valley. RENTS DEMAND Largest transaction in Heathrow Heathrow Cargo Centre 159,116 sq ft unit taken up by World Wide Flight Services Largest transaction in Thames Valley Slough Trading Estate 117,400 sq ft unit taken up by Bidvest 3663 13,833 sq ft average size of units taken up in Western Corridor. INVESTMENT Available Grade A space increased 5% over the 12 months to mid- 2015 and stood at 1.2 million sq ft. Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Total available supply across the Western Corridor fell by 22% in the 12 months to mid- 2015 to stand at 7.2 million sq ft. At the end of September 2015 there were 13 schemes speculatively under construction in the Western Corridor totalling around 888,000 sq ft. Headline rents Increased in key markets over the 12 months to September 2015. Rents rose in: Park Royal, Greenford, Heathrow, Hounslow, Uxbridge, Staines, Slough, Bracknell, High Wycombe, Basingstoke and Camberley. Incentives Moved in over the past 12 months due to diminishing supply - the market is more landlord favourable than 12 months ago. Prime Yields West London: 4.00% - 4.25% Thames Valley: 5.00% Investment market strengthened. Yields moved in 50-100bps over past 12 months. 2 The Western Corridor Industrial and Warehouse Market Report Autumn 2015

Introduction The Western Corridor includes the UK s highest value industrial market based around Heathrow Airport and one of Europe s largest multi-owned industrial areas Park Royal. The Corridor benefits from excellent infrastructure including an extensive motorway network and the UK s only international hub-airport at Heathrow. These location and infrastructure attributes mean that this Corridor is often considered to be the UK s premier industrial market by developers and investors, and by companies servicing both domestic and international markets. This report takes stock of market conditions across the Western Corridor and considers the implications of the Airports Commission s recommendations and the impact of High Speed 2 (HS2). The Western Corridor Industrial and Warehouse Market Report Autumn 2015 3

Economic outlook The most recent GDP numbers suggest that the UK economy continues to grow at a respectable rate; GDP grew by 0.7% in the second quarter of 2015 following growth of 0.4% in Q1. Services, which account for more than three-quarters of UK GDP, grew 0.7% in Q2 and production increased by 1.0%. GDP was 2.6% higher in Q2 2015 compared with the same quarter a year ago. The latest (August 2015) average of new independent forecasts monitored by HM Treasury shows GDP growth this year of 2.6%, followed by 2.4% in 2016. This compares with corresponding forecasts of 2.6% and 2.3% at February 2015. The latest labour market figures for the UK show that the unemployment rate for April-June 2015 stood at 5.6%, slightly up on January to March 2015 but lower than the same period a year ago. The Consumer Price Index stood at 0.1% at July 2015. At its August meeting, the Bank of England s Monetary Policy Committee voted 8-1 to hold interest rates at their historic low of 0.5%, a level they have been at since March 2009, but the expectation is that rate will rise modestly from next year. Regional forecasts from Oxford Economics continue to suggest that London will lead regional output and employment growth over this year and the next five years, with the South East also predicted to grow more strongly than the UK overall. Given these forecasts, we expect occupier demand for industrial and distribution space to remain strong in the Western Corridor over the next few years. 4 The Western Corridor Industrial and Warehouse Market Report Autumn 2015

Take-up Rise Grade in Grade A space A space continues taken to up account for a large share of demand In the first half of 2015 around 2.8 million sq ft of industrial and distribution floorspace was taken up in the Western Corridor. This was 4% lower than in H2 2014 but 19% up on the same period a year ago. The level of take-up recorded in 2015 was 6% up on the 5-year half yearly average of 2.7 million sq ft. Take-up in the Western Corridor (000 s sq ft) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2009 Source: JLL H2 2009 2010 H2 2010 2011 H2 2011 2012 Grade A Space H2 2012 2013 H2 2013 2014 H2 2014 2015 Take-up in 2015 was boosted by an increase in demand for Grade A space. Some 866,000 sq ft of Grade A space was transacted in, including both existing units and new built to suit space. This was 44% higher than H2 2014, when around 602,000 sq ft was taken up. In the first half of 2015 a number of food companies chose to take space in West London, a continuing trend for the area. For example, Wasabi signed for a new bespoke unit at Origin in Park Royal totalling 65,000 sq ft and Adelie Foods signed for a 102,900 sq ft new speculatively built unit at Prologis Park, Heathrow. The Thames Valley accounted for 46% of take-up in 2015, with 1.3 million sq ft transacted in this market. Demand in the Thames Valley was 14% up on H2 2014 and 34% up on the same period a year ago. Demand in this area was boosted by a pick-up in Grade A take-up, which totalled more than twice the level recorded in the second half of 2014. The Thames Valley has historically attracted a large number of trade occupiers and the first half of 2015 was no different in this respect. The automotive after sales industry, DIY/home improvement and builders merchants were the main sectors that took space in. Trade companies tend to take smaller units of 5,000 10,000 sq ft and therefore their impact on overall take-up levels is quite modest. However, this sector is an important one because occupiers will typically pay premium rents and this may also pull up the general tone of rents for standard industrial units in the market. In terms of the area s two main sub-markets, West London accounted for 54% of total take-up, with 1.5 million sq ft of industrial and distribution floorspace transacted in 2015. Take-up in West London was 15% down on H2 2014 but 8% up on the same period a year ago. Although demand in West London was lower in 2015 compared with H2 2014, demand for Grade A space remained robust with approximately 150,000 sq ft more Grade A space taken up in 2015 than in H2 2014. The Western Corridor Industrial and Warehouse Market Report Autumn 2015 5

Supply Availability is at its lowest level since 2003 Availability at its lowest level since 2003 At mid-2015 the total amount of available industrial and distribution space in the Western Corridor stood at 7.2 million sq ft, its lowest level since 2003. Industrial and distribution availability in the Western Corridor was 2 million sq ft lower than it was 12 months ago representing a 22% reduction. The percentage fall in availability over this period was the largest year-on-year reduction in 19 years. Supply in the Western Corridor (000 s sq ft) 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Source: JLL 2008 2009 2010 2011 2012 Grade A Space 2013 2014 At the end of June 2015 approximately 16% of the total availability comprised Grade A floorspace, totalling 1.2 million sq ft. This was roughly unchanged on 12 months previous when 1.1 million sq ft of Grade A floorspace was available. 2015 There was approximately 3.4 million sq ft of industrial and distribution space available in West London at mid-2015, accounting for approximately 48% of total supply in the Western Corridor. Availability in West London fell by a third over the 12 months to June 2015. At the end of June 2015, approximately a quarter of all available floorspace in West London comprised Grade A space. Speculative development has picked up over the last year and at the end of June 2015 there was 844,000 sq ft of Grade A space available, whereas a year ago this figure was 698,000 sq ft. There was approximately 3.8 million sq ft of industrial and distribution space available in the Thames Valley at mid-2015, accounting for approximately 52% of total supply in the Western Corridor. Availability in the Thames Valley fell by 8% over the 12 months to June 2015. At the end of June 2015 approximately 9% of the available floorspace in the Thames Valley comprised Grade A space (330,000 sq ft). This was 20% lower than 12 months earlier when 415,000 sq ft of Grade A space was available. The decline in the availability of Grade A space in both West London and the Thames Valley over the last few years reflects both the pick-up in demand for modern space and limited new speculative development. Even with a pick-up in speculative development, this space has been taken up quickly and as a result there has not been enough new development to replenish the diminishing stock. 6 The Western Corridor Industrial and Warehouse Market Report Autumn 2015

Rents Prime rents rising sharply in key locations across the Western Corridor Since early 2013 the improvement in economic conditions and occupier demand have led to rising industrial rents in the Western Corridor. In the last 12 months some locations have become hot spots exhibiting strong rental growth; this has happened both in West London and the Thames Valley. In West London, Origin in Park Royal is currently quoting 15.50 psf on its speculative units, up on the start of the year when the quoting rents were 14.50 psf. In addition SEGRO s new speculative developments at Westway Industrial Estate, East Acton and Quad Tudor Industrial Estate, Park Royal are now seeking quoting rents of 16.50 psf. Hermes Perivale Park development in West London has seen rents rise sharply over the course of this year; at the start of the year the quoting rent was 10.50 psf but this has now moved up to 12.50 psf. Wave Trade Park in Acton, owned by DTZi, is currently quoting rents of 14.75 psf which are up from the start of the year when they were quoting rents of 14.00 psf. Prime headline rents around Heathrow Airport stand at circa 15.00 psf and at the Portal quoting rents stand at 17.50 psf. In addition, non-prime locations in West London are also recording strong growth quoting rents. For example, SEGRO s Stockley Close scheme in West Drayton is now quoting 13.50 psf. Moving towards the West London/ Thames Valley border, Oyster Park in Byfleet, which was developed by Canmoor and BA Pension Fund, has seen rents rise sharply over the last 12 months. The park is now fully let with the last two units achieving rents of 9.50 Reading High Wycombe 9.00 8.75 Basingstoke M4 13.00 and 13.50 psf, whereas a year ago quoting rents at this park were at 11.50 psf. At Winnersh Triangle, on the outskirts of Reading, rents step up over the last 18 months. At the start of 2014, 11.75 psf was achieved at the scheme, but this stepped up to 12.25 psf in mid-2014 and now asking rents are at 12.75 psf. A number of other locations in the Thames Valley have also seen strong rental growth over the last 12 months. For example, prime headline rents in Bracknell stood at around 10.50 psf in September whereas 12 months previously they were 9.00 psf. Rents have also risen 50p per sq ft in Slough to reach 13.50 psf at September 2015 compared with 13.00 psf 12 months ago. Rents have been gradually increasing in key locations over the last couple of years and some locations are now recording rents at an all-time high. The Western Corridor market is now strongly landlord favourable. Maidenhead Slough M4 M25 M25 Uxbridge 11.75 Hounslow 10.50 Staines 12.00 Bracknell Camberley 10.00 10.50 13.50 13.50 M4 Heathrow 15.00 Greenford Western Corridor Rents: per sq ft 13.00 15.50 Park Royal Central London The Western Corridor Industrial and Warehouse Market Report Autumn 2015 7

Speculative development Speculative development has been a hot topic in the Western Corridor over the last couple of years as supply has been falling. As a result, the market has seen a pick-up in speculative development across the Western Corridor particularly around Heathrow and Park Royal. However, the demand for prime space continues to outstrip supply and newly built speculative units have been taken up rapidly. As a result, in some locations there is still not enough prime supply to meet demand. At September 2015 there was approximately 873,000 sq ft of new floorspace speculatively under construction across 13 schemes in the Western Corridor. The majority of floorspace was under construction in West London; 680,000 sq ft in eight units. Heathrow Logistics Park, which is a new development by Blackrock and Graftongate, accounts for a large amount of space being developed in West London. This is a four-unit scheme totalling 308,000 sq ft with completion due in Q3 2016. There was almost 208,000 sq ft of new floorspace speculatively under construction in the Thames Valley across five schemes. Kier is constructing the second phase of Trade City in Bracknell after its successful development of phase one. DTZi is constructing 17,800 sq ft at Houndsmill Trade Park in Basingstoke which will be a new fiveunit trade scheme where quoting rents are 12.50 psf. Chancerygate is building a six-unit scheme at Evolution in Farnborough - the units here will be sold and the quoting price is 135 psf, Investream is building out 25,188 sq ft at Frimley 4 Business Park and SEGRO is developing 61,000 sq ft on the Slough Trading Estate. There are a number of developers and funds looking at further opportunities in West London and the Thames Valley and we expect to see more speculative development in the Western Corridor over the next 12 months. This will bring a much needed additional supply of Grade A space to the market. Speculative schemes under construction in West London at September 2015 Scheme Size (sq ft) Developer Dawley Distribution Park, Hayes 72,120 Chancerygate Wembley Trade Park, Wembley 34,000 XLB Property Westway Industrial Estate, Park Royal 47,028 SEGRO Origin Phase Two, Park Royal 34,560 SEGRO Quad, Tudor Park, Park Royal 37,400 SEGRO Speculative schemes under construction in the Thames Valley at September 2015 Scheme Size (sq ft) Developer Trade City, Bracknell 58,828 Kier Houndsmill Trade Park, Basingstoke 17,800 DTZi Evolution, Farnborough 45,058 Chancerygate Frimley 4 Business Park, Frimley 25,188 Investream Slough Trading Estate 61,000 SEGRO Riverside, Uxbridge 26,694 SEGRO Prologis, Dawley Road, Hayes 120,420 Prologis / Cedarwood Heathrow Logistics Park, Heathrow 308,000 Blackrock / Graftongate 8 The Western Corridor Industrial and Warehouse Market Report Autumn 2015

Speculative development in the Western Corridor at September 2015 High Wycombe M25 26,694 sq ft Reading M4 Maidenhead 61,000 sq ft Slough Windsor M4 M25 Uxbridge 152,988 sq ft Hounslow Greenford Park Royal M4 Brentford Hammersmith Heathrow 500,540 sq ft Central London Wokingham Bracknell 58,828 sq ft Chertsey Staines Basingstoke Farnborough & Frimley 17,800 sq ft 70,246 sq ft The Western Corridor Industrial and Warehouse Market Report Autumn 2015 9

Western Corridor local sub-markets Last year we looked at the Western Corridor s two main sub-markets, West London and Thames Valley, in more detail by segmenting West London into its three main local sub-markets - Park Royal/ Greenford, Hayes & Uxbridge and Heathrow Airport. We have done this again this year as this segmentation provides an opportunity for our key agents to complement our research data with their market insights. James Miller Associate West London: Greenford/Park Royal The A40 market including Park Royal, Acton and Greenford is accelerating at a rapid pace with supply struggling to keep up with demand. This is evident for units in all size ranges but most notably for small-medium size units from 5,000-15,000 sq ft where new build schemes including Wave Trade Park, Acton and SEGRO s development at Westway Estate, East Acton are performing well with rents now pushing 15.00 per sq ft and beyond. These new schemes are creating a ripple effect on existing estates and second hand units where rents are being pushed up across the board and void rates are hitting all-time lows. This is demonstrated by SEGRO s Metropolitan Park in Greenford, which saw over 100,000 sq ft let across multiple transactions last year, and also by Hermes Perivale Park as well as Aviva Investors Abbey Road Industrial Estate, both of which are down to the last remaining unit. Melinda Cross West London: Heathrow What a difference a year makes! Last year we were all pushing hard to get the limited number of sites available to a point where developers and funds were comfortable to start building. Now, in all honesty, the new units cannot be delivered quick enough. At the end of 2014 we were at 12.00-13.00 psf for the prime space. I am now confident of two things: one, headline rents will hit 15 psf within the next tier down from the cargocentric locations and, two, in the next phase of speculative development in Heathrow, a number of commitments will be secured before practical completion (PC). I am comforted that the sites being brought forward are all unique in this market - all offering differing products, sizes and accommodation. As long as all of us agents have got it right, all of the schemes should be of interest to a variety of, primarily, airport operators with good takeup either side of PC. On the larger scale, following on from the success of Phase 1, Origin continues to lead the way with construction of SEGRO s Phase 2 of the scheme well underway and the pre lettings to John Lewis and Wasabi now exchanged for units of 108,000 sq ft and 65,000 sq ft respectively. The recent lettings of Unit 1 Greenford Park (c. 85,000 sq ft) and Unit 32 Perivale Park (c. 54,000 sq ft) in addition to 1 Western Avenue (c. 80,000 sq ft) being under offer, provide further evidence of occupier s appetite for existing Grade A stock within the larger size bracket. The sentiment is extremely positive but the challenge remains to identify new land and opportunities going forward. 10 The Western Corridor Industrial and Warehouse Market Report Autumn 2015

David Peck West London: Uxbridge/Hayes The Hayes and Uxbridge market has continued to perform well attracting occupiers wishing to be within striking distance of Heathrow and West London, and also being in close proximity of the M25, M4 and M40. This is therefore a popular location for logistics and distribution companies who don t need to be right on top of the airport and who can therefore benefit from slightly lower rents. The last 12 months has been a transitional period during which the upper hand has finally swung in favour of the landlord. Tenants have found that there is limited space available and realised that rental levels have risen. Typical rent free periods have halved to circa six months for five year terms, and circa nine - twelve months for ten years. Three-year break options are almost a thing of the past with five-year terms now being the norm, and some landlords are only considering a straight ten-year term for their better quality space. Particular attention is being paid to covenant strength; we are seeing average covenants offering rent deposits and being turned down as landlords are prepared to wait for better options. Un-refurbished property is becoming quite hard to find around Uxbridge and Hayes as landlords are realising the value and potential returns that can be achieved by refurbishing their property. LaSalle Investment Management s holding on Swallowfield Way in Hayes now has only one unit remaining of c. 21,000 sq ft and is looking at refurbishment, however due to current strong demand it could be let un-refurbished if a good offer is put forward shortly. Dunedin have recently let three of their units on Eskdale Road in Uxbridge each comprising approximately 5,000 10,000 sq ft and are about to undergo an extensive refurbishment on the last remaining units which will push their rents on further still. SEGRO has enjoyed a good run of form on Riverside Way in Uxbridge with the last two units now under offer. This includes its new 26,694 sq ft flagship unit next to the Premier Inn hotel which is under construction and due to PC in Nov/Dec. Kier s new Trade City scheme nearby in Uxbridge has also done well with only a few units now remaining. Shaun Rogerson Thames Valley Across the Thames Valley, tenant demand has been outstripping supply resulting in a steep rise in rents in certain markets, such as Bracknell, Byfleet and Woking. Bracknell, in particular, has seen rents jump sharply over the past year, with 10.50 per sq ft recently achieved on a 34,000 sq ft second hand refurbished industrial unit on Eastern Road, whereas 12 months ago 9.00 per sq ft represented the general tone for prime. Along the M3, the last remaining units at BA Pension Fund s and Canmoor s Oyster Park in Byfleet were let at 13.50 sq ft for the smaller unit (3,800 sq ft) and 13.00 per sq ft for the larger unit (7,400 sq ft) compared with 11.50 per sq ft achieved on earlier lettings a year ago. With very little supply, developers are getting ready to press ahead with more speculative development, although this remains modest in scale. SEGRO recently purchased the former BMW site (13 acres) in the Southern Industrial Area in Bracknell, where it is planning to develop speculative units from 40,000 sq ft upwards; SEGRO also has an 11-acre site at 225 Bath Road, Slough, which it is planning to offer on a D&B basis for big box logistics. Elsewhere, Chancerygate is on site with its Evolution scheme at Farnborough, offering six units on a freehold basis at a quoting price of 135 per sq ft. Kier is working up plans at its Reading Gateway site, close to junction 11 of the M4 for mixed-uses including residential, retail, trade and warehousing. The trade counter market remains very buoyant driven by demand from companies servicing the home improvement market, DIY and the automotive after sales. USS recently completed its six-unit trade scheme at Reading, which has attracted strong interest off quoting rents of 12.50-14.50 psf, and Kier recently started development of a 12 unit second phase, Trade City scheme in Bracknell. DTZi with Hartbury are developing a five-unit trade scheme at Houndmills in Basingstoke along with a drive thru and a restaurant unit. With economic growth expected to remain solid in the short-term, demand is likely to continue to outstrip supply in the next 12 months so we expect further rental growth to follow. The freehold market is continuing to thrive with cash-rich local occupiers looking to buy instead of rent. Demand for freeholds far outweighs supply and values are still rising. The Chancerygate scheme on Swallowfield Way in Hayes is now achieving circa 165 psf for refurbished space and 175 psf for new units. Pump Lane nearby is particularly in demand with figures of 180 psf being offered for new kit. The Western Corridor Industrial and Warehouse Market Report Autumn 2015 11

Airports Commission In July 2015, the Airports Commission published its final report into airport capacity in the South East and recommended that a new (third) runway be built at Heathrow to the north west of the Airport. This option was judged to provide significantly more benefits than the other two shortlisted options respectively involving the extension of the existing northern runway at Heathrow Airport, or a second runway at Gatwick. The Prime Minister subsequently set up a committee to review the Commission s finding and a political decision will be made before the end of this year. However, whatever this committee decides it is likely that this will only be the start of a protracted approval process. If the Government endorses the Commission s recommendation and the necessary planning approvals are secured, the Commission estimates that some 569ha of land would be directly required for the airport s development. This would involve the loss of a significant number of homes, including part of Harmondsworth, and a number of commercial and industrial properties along, and off, the Bath Road. Despite, or perhaps because of this uncertainty, tenants are still prepared to commit to long leases in the affected area. This is likely to reflect the fact that should their properties subsequently need to be compulsorily acquired then the occupying businesses would be entitled to more compensation to reflect their longer lease commitments. Occupiers are also of the mind-set that any decision and actual building of a third runway will be at least five to ten years away. High Speed Two In addition to the expansion of Heathrow, the construction of the first phase of High Speed Two (HS2) from London to Birmingham will have a significant impact on parts of the Western Corridor industrial market, notably around Old Oak and Park Royal in West London. At present, the approval for the first phase of HS2 is progressing through Parliament via a Hybrid Bill - High Speed Rail (London West Midlands) Bill. First published in November 2013, this Bill is expected to complete its passage through Parliament by the end of 2016 and once approved construction should start in 2017. A vast amount of the track will be routed underground through West London. However, we see three major industrial market impacts. First, the development of the HS2/Crossrail Interchange at Old Oak Common will result in the loss of industrial land at this location. An additional greater loss of industrial land will result from the planned redevelopment of the wider Old Oak area to provide a new residential and office area creating some 24,000 new homes and 55,000 new jobs. Second, the requirement for temporary HS2 construction sites will displace current occupiers and take a number of additional sites out of their present industrial use in Park Royal. Although these could potentially return to industrial use in the future this may not be for 10 years or more. We are aware of a number of companies with requirements for space resulting from their current sites being required for HS2 construction. Third, in addition to sites that are required for construction purposes, it is likely that the construction would have wider effects on parts of Park Royal due to the works activity and volume of traffic it is likely to generate. As a result, some parts of Park Royal, eg on and around Old Oak Lane/Victoria Road, may become less attractive for occupiers, developers and investors during a long construction phase. 12 The Western Corridor Industrial and Warehouse Market Report Autumn 2015

Investment market Investor appetite for industrial stock in the Western Corridor remained strong in the first half of 2015 driven by growth in the London and South East economies and increasing evidence of rental growth. There is a substantial weight of money targeting the sector with investors focusing on larger lot sizes and better quality units, but there continues to be a lack of stock in the market. As a result, yields have continued on a downward trajectory. In west London prime yields currently stand at 4.00-4.25%, 75-100bps in from last year when yields stood at 5.00%. Prime yields in the Thames Valley stand at 5.00%, 50bps in from 12 months ago. Rising rents in key locations across the Western Corridor are a strong factor driving investor demand. As yields have moved in quite rapidly over the last couple of years, investors are now looking more strongly at rental growth on their assets in comparison to capital growth. A recent transaction that took place in the Western Corridor demonstrates the strength of this market and how yields have moved in. In August, Aviva Investors sold the Oxgate Centre in Staples Corner to Standard Life for 15.13 million representing a net initial yield of 4.57%. The estate has a WAULT of 10 years to expiry and 8.6 years to break. This was a more secondary estate, suggesting that if a prime estate had been on the market then an even a lower yield would have been achieved. Looking forward, we see potential for some more modest yield compression this year. Investors will continue to target assets in key locations which are expected to see further rental growth. Outlook The UK economy is forecast to grow 2.6% in 2015 and 2.4% next year. London is forecast to lead the way in terms of output and employment growth. With a good level of transactions already completed in the first couple of months of Q3, we expect take-up in the second half of the year to exceed the level recorded in. Supply has continued to diminish and Grade A availability is low. We expect to see further speculative development over the next few years. We expect to see further rental growth - JLL s latest model-based forecasts of IPD predict that standard industrial properties in both London and the inner South East will grow by 3.6% pa over the five-year period 2015-2019. We envisage that there is some further potential for yield compression over the coming months due to the strength of investor demand and limited supply. Looking forward, given all of the above, over the next 12 months the Western Corridor is likely to continue see strong activity from occupiers and developers and continuing strong demand from investors. As a result, its place as one of the UK s leading industrial markets looks secure. The Western Corridor Industrial and Warehouse Market Report Autumn 2015 13

Headline transactions Recent key investment transactions in 2015 Property Size (sq ft) Achieved Price Net Initial Yield Purchaser Vendor Brook Industrial Estate, Hayes 45,847 9.1 m 5.10% Capital Industrial CBREGi Waterway Park, Hayes 139,970 23.7 m 5.25% DTZi McAlpine St Georges Industrial Estate, Camberley 48,147 8.05 m 6.00% Camberley Council Aberdeen Mount Road, Feltham 84,039 9.4 m 5.46% Private USS Recent key occupational transactions in 2015 Property Size (sq ft) Occupier Poyle 14 150,000 DHL Slough Trading Estate 112,000 Data Centre Operator Prologis Park, Heathrow 102,900 Adelie Foods Origin Park Royal 65,000 Wasabi Stockley Close, Heathrow 56,947 Ocado 14 The Western Corridor Industrial and Warehouse Market Report Autumn 2015

Western Corridor map and definitions A4 THEALE READING A329(M) A4 MARLOW A40 MAIDENHEAD WOKINGHAM M4 CAMBERLEY M40 BRACKNELL M3 Thames Valley WINDSOR A30 STAINES M3 West London RUISLIP GREENFORD A40 UXBRIDGE SLOUGH M25 EALING LANGLEY WEST HAYES IVER DRAYTON SOUTHALL EGHAM POYLE HEATHROW FELTHAM CHERTSEY WEYBRIDGE M25 BRENTFORD PARK ROYAL RICHMOND HOUNSLOW TWICKENHAM TEDDINGTON SUNBURY CHISWICK HAMMERSMITH HOOK BASKINGSTOKE A30 FARNBOROUGH This map shows the boundaries of the survey area. It is divided into West London and Thames Valley and then into submarkets. The submarkets are known by the name of a key town, although other towns and areas fall within them. Data employed is derived from various information sources collected by JLL Research. Definitions Take-up: Floorspace acquired for occupation by lease, prelease, freehold or long leasehold sale. Units over 2,000 sq ft. Supply: Floorspace on the market and available for occupation. Units over 2,000 sq ft. Grade A Rent: The JLL view of the highest rent achievable for Grade A space in a prime location, without any adjustment for incentives. Building Classes Grade A: Well located and good specification, generally new or less than five years old. The Western Corridor Industrial and Warehouse Market Report Autumn 2015 15

JLL offices London - West End 30 Warwick Street London W1B 5NH Tel: +44 (0)20 7493 4933 Fax: +44 (0)20 7087 5555 Western Corridor 8 The Square Stockley Park Uxbridge UB11 1FW Tel: +44 (0)20 8759 4141 Fax: +44 (0)20 8759 5367 Contacts Andy Harding Industrial & Logistics West End +44 (0)20 7087 5310 andy.harding@eu.jll.com Melinda Cross Industrial & Logistics West London/Thames Valley +44 (0)20 8283 2591 melinda.cross@eu.jll.com David Peck Industrial & Logistics West London/Thames Valley +44 (0)20 8283 2592 david.peck@eu.jll.com Shaun Rogerson Industrial & Logistics West End +44 (0)20 7087 5307 shaun.rogerson@eu.jll.com James Miller Associate Industrial & Logistics West End +44 (0)20 7087 5764 james.miller@eu.jll.com Sam Fairbairn Industrial National Investment West End +44 (0)20 7087 5382 sam.fairbairn@eu.jll.com Jon Sleeman UK Research +44 (0)20 7087 5515 jon.sleeman@eu.jll.com Tessa English Associate UK Research +44 (0)20 7087 5521 tessa.english@eu.jll.com The Western Corridor Industrial and Warehouse Market Report Autumn 2015 www.jll.co.uk/industrial-logistics COPYRIGHT JONES LANG LASALLE 2015. This publication is the sole property of Jones Lang LaSalle IP, Inc. and must not be copied, reproduced or transmitted in any form or by any means, either in whole or in part, without the prior written consent of Jones Lang LaSalle IP, Inc. The information contained in this publication has been obtained from sources generally regarded to be reliable. However, no representation is made, or warranty given, in respect of the accuracy of this information. We would like to be informed of any inaccuracies so that we may correct them. Jones Lang LaSalle does not accept any liability in negligence or otherwise for any loss or damage suffered by any party resulting from reliance on this publication.