US gaming blog Kotaku, went on the record with information that Watch Dogs 2 will be released in 2016 and that it will be set in San Francisco. Kotaku noted it as a possible replacement for Assassin's Creed (that alledgedly skips over this year's holiday season), but didn't cite any specific sources for their information.
Timing wise it would make sense with a new Watch Dog title this year as the original in May, 2014. There is currently no official word from Ubisoft that a sequel is under way, but there is no reason to assume they wouldn't have a sequel in development.
Ubisoft have yet to comment on any of these rumours (Assassin's Creed skipping over 2016 and Watch Dogs 2 arriving this year). So for now it should be filed under rumours, we'll keep you posted with any developments.