CENTRAL LONDON OFFICE INVESTMENT HITS £16.4BN
Central London office investment transactions totaled £3.5bn in Q4 2017, bringing the year-end total to £16.4 billion. Q4 2017 saw a 26% quarterly fall in investment volumes compared to Q3 2017, however, turnover for the full-year was 26% higher than 2016 and was the fourth highest annual total on record.
Overseas investors transacted 81% of all investment volumes in 2017, the highest percentage share on record. £6.9bn of investment was from Asia, accounting for 54% of total overseas investment, and a record £5.85bn of overseas investment was from Hong Kong; higher than the total HK investment for the last three decades combined.
During Q4 2017, there was an even split of investor types. Whilst Asian investors once again led the way, accounting for 25% of all transactions in Q4 2017, there were similarly strong representations from UK and North American investors, who both accounted for 24% of total transactions. European investors accounted for 16% of the total. Vendors of Central London office stock remained largely domestic in the final quarter of 2017, making up 65% of the sell-side. This mirrored the trend seen throughout the year, with domestic vendors accounting for 66% of the total market.
London has been a focal point for global investors since recovering from the Financial Crisis, with interest reaching a new high peaking in 2017. This was largely driven by the landmark sales of 20 Fenchurch Street and 122 Leadenhall Street, which both sold for more than £1bn. However, increasingly over the course of the last 12 months we have seen this wave of investment into London pushing capital into more affordable, up-and-coming cities like Manchester and Birmingham, as some investors are unable to compete with the international money coming into London.