Central London investment activity totalled £4.26 bln (approx. €5.7 bln) in Q1 2015, which is one of the strongest investment starts to a year, only marginally behind record Q1 2014 activity of £4.31 bln (approx. €5.8 bln).
Investment activity is polarized
The City investment market continues to perform very well and investment volumes stood at £3.4 bln (approx. €4.6 bln), which is some 42% ahead of the five-year average.
In contrast, West End volumes stood at £864 bln (approx. €1.1 tln) – only half of the five-year average volume level – and reflects the lack of investment stock coming forward in the West End.
The City investment market was fuelled by transactions between £50-£100 mln (approx. €70 - €130 mln), but with limited stock coming through at this level, this was reflected in above asking prices being achieved – approximately 13% ahead of asking.
More investors are looking towards new markets
The Clerkenwell & Shoreditch, Aldgate & Whitechapel and Southbank submarkets accounted for 28% of central London transactions by number, which is up from 11% a year ago, while a number of buildings in west London were brought to the market this quarter and are already under offer.
North American and Asian investors were positive investors across Central London during the quarter, while European investors were the main disposers across the capital – primarily driven by German investors offloading some significant property holdings in the City market. This quarter investors from China and Hong Kong were the most active net investors in Central London, but with a focus on the City office market.
Cushman & Wakefield’s head of London capital markets, James Beckham, said: “Asian investors have extremely high saving rates, and they are now applying those through their life companies into international markets. The first port of call for this type of capital is of course London.”
Source: Cushman & Wakefield