Research - AUGUST 8, 2017

Central London investment up 12.3% on 2016 levels

by Andrea Waitrovich

The first half of 2017 has seen almost £9 billion ($12 billion) invested in the Central London office markets – 12.3 percent up on the same time period last year – according to Savills.

The City of London saw a new first half 2017 record being set, with investment reaching £4.98 billion ($6.46 billion) in the first six months of 2017, 17 percent up on H1 2016, while in London’s West End market investment reached £3.9 billion ($5.1 billion), the second highest first half volume on record.

Asian investors have continued to be the most active in the City market, accounting for 50 percent of the 64 deals transacted in H1 2017, with an average deal size of £147.39 million ($191.3 million). While European investors comprised only 25 percent of turnover, their average deal size was larger at £205 million ($266 million).

In the West End market Asian investors were responsible for 38 percent of the 55 West End deals transacted during the first half of 2017, but U.K. investors were responsible for 24 of the 55 deals transacted in the first half of the year – 44 percent of the total number. The average transaction size involving a U.K. investor was £44 million ($57 million), compared to £134 million ($173.9 million) for Asian investors.

Taking both markets together, Asian investors were responsible for 45 percent of all Central London turnover, European investors 26 percent and U.K. investors 21 percent during the first half of 2017.

Demand for trophy assets in the City this year has remained strong. Savills says that the total value of the ten largest deals transacted to the end of June 2017 is £3.4 billion ($4.4 billion), compared with the ten largest across the whole of 2016 which totalled £3.1 billion ($4 billion).

In the West End a record six transactions of over £200 million ($260 million) were documented in the six months to the end of June 2017, totaling £1.64 billion ($2.13 billion), says Savills, making up an unprecedented 42 percent of total volume.

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