Investment activity in the West End during the first quarter of 2002 has plummeted to levels not seen since the early 1990â€™s, says international property adviser FPDSavills.
According to FPDSavills West End commercial investment team, only Â£350 million of transactions have exchanged since the new year resulting in the slowest start to the year since the early 1990â€™s in terms of turnover.
Commenting on the fall in activity, Keith Mackie of FPDSavills, says: â€œDespite strong demand amongst investors, owners have been reluctant to sell as they feel values have dipped. In the last two years, office tenants expanded rapidly and took leases on record amounts of office space. Now that they are more cost conscious much of this space is coming back to the market and depressing rents.
â€œHowever, record low interest rates has pushed up values for buildings let on long leases and these have been hotly contested in the market. The poor performance of the stock market has pushed many investors to consider property but most have been left frustrated by lack of suitable stock. UK players have been the most active this year with institutions and property companies generally selling to private investors.â€
Despite the slow office investment market, Bond Street has seen record levels of activity and in the last year with DKNY, Chanel, Gucci, Cartier, Daks and Dolce & Gabanna having all changed hands. Most of the buyers have been Irish investors attracted by, â€œthe prestige and security of the location and rapidly rising rents, particularly at the bottom of the street towards Piccadillyâ€ adds to Mackie.