World No.1 for cross border investment continues to draw buyers - London

According to Savills, April 2017 saw £1.27 billion invested in central London commercial property across 20 deals, taking total investment volumes for the year to date to a record £5.89 billion, 4% ahead of the same point last year. Notably, £3.4 billion of all transactions occured in the City, a 13% mark-up on the same point last year, says the international real estate advisor.

In April, Savills recorded £694 million traded in the City across nine deals. Asian buyers took the lion’s share of activity (50% market share) and notably German investors accounted for 26% of all deals. The West End saw £578 million transacted over 11 deals in April. Asian purchasers accounted for the majority of turnover in the West End with a 43% market share while European purchasers, again predominently from Germany, made up 35% of all transactions.

Key deals in April included WELPUT’s sale of 3 St James’s Square, totalling 51,747 sq ft of Grade A office in the West End, to Joint Treasure for £135 million. In the City of London Deka acquired the trophy asset Cannon Place, EC4 at approximately £485 million in the second largest City transaction of 2017.

Stephen Down, executive director and head of Savills central London investment team, comments: “There is a significant weight of money chasing London assets: at the end of the first quarter, Real Capital Analytics’ data showed that London was the world's number one pick for cross-border investment, followed by Hong Kong and Manhattan. Both central London markets are dominated by international investors, particularly those from Asia and Europe who view London as a safe haven globally and can maximise the opportunities of a very favourable exchange rate.”

Savills prime City yield remains at 4.00% with the West End prime yield currently at 3.25%.