The third quarter of 2017 saw investment of £4.82 billion ($6.33 billion) in Central London’s commercial property market, up from £3.1 billion ($4.1 billion) during third quarter last year and up from £4.41 billion ($5.79 billion) during second quarter this year, according to Cushman & Wakefield
This takes the total investment in London in the first three quarters of 2017 to £13.65 billion ($17.91 billion).
City of London transactions during third quarter totaled £3.25 billion ($4.27 billion) and the trend of acquisitions from Asia Pacific investors continued, with investment from the region accounting for a 74 percent share of total outlay in the City’s commercial property market.
This figure was boosted substantially by the purchase of 20 Fenchurch St. — otherwise known as the “Walkie Talkie” — which was acquired by Infinitus Property Investment (Hong Kong) Limited, a wholly-owned subsidiary of LKK Health Products Group, for £1.285 billion ($1.69 billion) in July, a record for a single building in the U.K. This was one of four purchases by Hong Kong–based investors during third quarter for £250 million ($328 million) or more. On the sell side, U.K. vendors dominated (68 percent), marking a noticeable shift in the market from United Kingdom to Asia Pacific ownership.
“The weight of money from Asia Pac shows no signs of abating and the high levels of liquidity in the market are reflected in the average lot size in the City increasing to £116 million ($152 million) in third quarter,” said Martin Lay, joint head of London Capital Markets at Cushman & Wakefield. “With more than £6 billion ($7.9 billion) of available stock currently on the market in the City, we expect further strong investor activity in the final quarter of the year, leading to total investment volumes in 2017 significantly outstripping last year.”
The West End of London saw £1.57 billion ($2.06 billion) of investment, with a far more balanced spread of buyer regions. Asia Pacific investors only accounted for 12 percent of total investment, which is smaller than Continental Europe (25 percent), Middle East (22 percent), United Kingdom (19 percent) and North America (16 percent). As in the City of London, most vendors were from the United Kingdom, making up 54 percent of vendors in the West End.
“The breadth of investors in the West End shows how strong the market is and that it’s still attracting investment from all corners of the world,” said Richard Womack, joint head of London Capital Markets at Cushman & Wakefield. “This speaks volumes about the health of the London market and should give investors confidence moving forwards.”
