An estimated £1.5 billion of commercial property was transacted across central London in the first two months of 2015, according to global property services firm DTZ.
The largest of the 33 transactions was the £270 million purchase of Christchurch Court, Paternoster Square by Shimao Property from Deka. Other significant deals include Norges’ £190 million acquisition of Queensbury House, 3 Old Burlington Street, from Sorgente Group and Tishman Speyer’s purchase of 100 New Oxford Street from Hermes and Canada Pension Plan Investment Board (CPPIB) for £130 million.
A total of 77% of investment came from outside the UK, the highest proportion since 2009. This was underpinned by investors from Asia Pacific who accounted for 32% (£489 million), markedly up on their five year average share of 16%. UK purchasers accounted for £348 million of acquisitions, accounting for the majority of the £590m investment from within Europe. As a region, Europe accounted for a 39% share.
China was the most active buyer from the Asia Pacific region, acquiring £277 million, followed by Singapore (£91 million) and Hong Kong (£59 million). North American investors acquired £270 million.
There are currently £6.9 billion of commercial properties for sale in central London, up from the £3 billion recorded at the end of 2014. By comparison, at this time last year, approximately £2.3 billion of commercial properties across central London were available or under offer. Current availability is partially explained by there being 20 buildings over £100 million currently available or under offer, at an average lot size of £226 million and total of £4.5 billion. Among the largest lots available are the Walbrook Building (£560 million) and 60 Curzon Street (£200m).
Sophy Moffat, Senior Analyst, Central London Investment, said: “Economic growth in the UK is forecast to continue to outpace many other major European countries over the next five years. This will support confidence in the strength of the leasing market and sustain strong investor appetite. We therefore expect overseas demand to remain strong.”
