More and more foreign investors are shifting their gaze towards London, according to new data released by property advisory firm Cushman & Wakefield.
In a recent report by the company, it has emerged that 71 per cent of the £2.75 billion in commercial sales were from international buyers in the first three months of 2013. The capital city proved very popular for investors in the Middle East, Asia and the US. Specifically the West End saw £965 million in property being exchanged in the first quarter, 51 per cent of which came from foreign investors. One of these large deals was 151 Buckingham Palace Road, bought for nearly £205 million by Lembaga Tabung Haji, the Malaysian pilgrims fund.
According to the Financial Times, Mike Tremayne, head of West End investment at Cushman & Wakefield, said: “Whilst the lack of available stock in the West End restrained investment volumes in the last quarter, the market continues to act as a target for overseas and domestic investors alike.”
However, it was not all good news for the sector. The total transaction figure in London had fallen by a mammoth 31 per cent, compared to the last quarter of 2012, when it had reached £3.98 billion. Furthermore, the number of transactions in the West End had also fallen from 40 to 33.
Analysts have suggested that this decline was caused by the lack of availability when it comes to commercial property in the capital city, as much of the £2.75 billion reported was down to a few large deals being made. These transactions include 5 Canada Square acquired by St Martins, the Kuwaiti government property fund, a £225 million sale of Palestra to the German Deka, and Woolgate Exchange for £265 million by TPG and Ivanhoe Cambridge of Canada.
Either way, it seems that for now, overseas buyers will be keeping an eagle eye on London’s commercial market.