Quantifying Culture
The London night-time economy contributes £26.3bn to London’s annual GDP and supports 1 in 8 jobs. The night-time economy will deliver a £3bn boost to the capital by 2029.
The growth of the night-time economy will be supported by the opening of the night tube, with over 100,000 trips made on its first weekend. (Source: TfL)
Over 250 festivals take place in London every year. The largest is the Notting Hill Carnival which attracts 2.5 million people every year and is the second largest carnival in the world. (Source: VisitBritain)
50% of nightclubs in London have shut down in the last five years. Of the 430 music venues which traded in London between 2007 and 2015, only 245 are still open (43% have closed). (Source: London Mayor, London Assembly)
London is home to 4 UNESCO world heritage sites, which are the Tower of London, Maritime Greenwich, Westminster Palace and Kew’s Royal Botanic Gardens.
London is home to 63 Michelin-star restaurants, which has almost doubled over the last 10 years, from 32 to 63. (Source: Michelin Guide main Cities of Europe 2016)
London has overtaken New York as the world’s second city in terms of Airbnb listings. In 2016 there were 47,000 Airbnb Listings (Source: Airbnb Data & Analytics)
There are 173 museums and 857 art galleries available and open to the public. Six of the top 20 museums and galleries in the world are in London. These are The British Museum, The National Gallery, the Natural History Museum, Tate Modern, the Victoria & Albert Museum and the Science Museum (South Kensington). (Source: TEA/AECOM 2015 Theme Index and Museum Index: The Global Attractions Attendance Report)
London Fashion Week generates over £100m of orders and over 32,000 hours of digital content watched in the UK from more than 100 countries. (Source: BFC, 2015 & Google Internal Data, 2015)
Open House Weekend – which opens up parts of the City not normally accessible to the public has been held on one weekend each September since 1992 with a total of 292,885 visits over the 2016 event. (Source: Open House London 2016 Annual Review)
Cultural tourists spend £7.3bn per year, generating £3.2bn for the economy and supporting 80,000 jobs in the capital.
London has more green spaces than any other European city. Roughly 47% of Greater London is green. (Source: Greenspace Information for Greater London 2015)
London has the highest proportion of International Tourists per Year. (Source: World Cities Culture Report 2015). London was the top-ranked city in Europe for Inbound Arrivals 2015, with international arrivals growing by just under 7% in 2015. (Source: Euromonitor International “Top 100 City Destinations Ranking”)
London is home to 43 universities which is the largest concentration of higher education in Europe. (Source: Top 200 universities in Europe; Times Higher Education World University Rankings 2016-2017)
Supply levels have increased across the capital during 2017, to reach 13.5 million sq ft at the end of April. This increase (16%) was to be expected due to the pipeline of new developments approaching completion, (a total of 1.9 million sq ft is now within 6 months of completion - but this also reflects the geographical expansion of Central London to include White City). Nevertheless, high levels of pre-let space (around 48% of space completed in the 18 months to 2017 Q3) has helped to alleviate the impact of new completions.
The volume of speculative space under construction contracted quarter on quarter by around 700,000 sq ft and the speculative pipeline remains relatively constrained into 2018. Eight million sq ft of completions are expected in 2017, but the majority of this is already included in supply data and therefore its impact has already been felt. 2018 could see up to 8.5 million sq ft delivered, albeit at this stage only 6.3 million sq ft is under construction. Currently, 61% of space already under construction has been pre-let or is under offer, leaving just 2.4 million sq ft of speculative space under construction. This suggests that there is potential for the recent upswing in supply to be reversed in the short term, even allowing for an increase in second hand space. Beyond 2018, there is scope for an upswing in development completions but much will depend upon the confidence of developers and available funding in these uncertain political and economic times.
We have already seen an uplift in sublet space across Central London with 3.1 million sq ft available at the end of Q1 compared with 2.1 million sq ft during the same period last year. Much of this sublet space was as a direct result of changes in business strategies and M&A activity, for example, rather than as a direct result of the vote to leave the EU, we estimate that sublet space currently accounts for 24% of supply; which while seemingly high, is virtually on a par with the average proportion since 2009 (and only falling back to volumes recorded as recently as 2015).
There is likely to be further tenant-sublet space brought to the market as occupiers reassess their holdings in relation to the changing business environment. However, we also anticipate a proportion to be taken up by cost sensitive tenants who continue to pursue value or seek short-term overflow space. It is useful to note that over half (54%) of the sublet space currently on the market is available for a term of less than five years and in absolute terms this is at a similar level to the volume of short term space that has been let over the last 12 months. Sublease space has a part to play in the market. This is certainly true as economic uncertainty, coupled with the cost of relocating and the relatively limited choice particularly for larger companies, has supported the trend for overflow space rather than committing to a full-scale move. To date in 2017, 16% of leasing volumes have been for sublease space, of which two thirds, by both volume and number, have been for a term of less than 5 years.
Looking forward, the market appears relatively insulated from any significant supply side shocks with limited volumes of speculative development due online over the next 18 months and some schemes pushed back, but not cancelled. As a result, although we expect supply to trend upwards, it will be at a relatively benign rate.
