December flurry signals return of confidence to Central London investment market

•Central London office investment volumes reach £4.9bn in Q4 2019

Central London office investment transactions totaled £4.9bn in Q4 2019, bringing the year-end total to £11.3bn, according to the latest figures from CBRE. The Q4 2019 volume represented a quarter-on-quarter increase of 125% and was on par with Q4 2018. An impressive £2.55bn transacted in December alone, signaling a return in confidence from investors following the conclusive Parliamentary election results. However, despite the flurry of late deals, the full year total fell to its lowest level since 2011. At £11.3bn, 2019 investment volumes were 36% down on the previous year.

A total of 16 transactions over £100m completed over the fourth quarter, more than in Q1-Q3 2019 combined, the largest being the £607.5m sale of the Post Building in Bloomsbury. For all of 2019, the largest transaction was the £1.1bn sale of 25 Canada Square in Canary Wharf.

Marking a notable change in investor profile, Q4 2019 was the most active quarter for domestic investment since Q3 2013. UK-based investors spent £2.3bn in the Central London investment market in Q4 2019, representing 48% of total investment volumes for the quarter.

The last year saw a decline in international investment. Having represented 76% of the investment market in 2018, overseas investors constituted 53% of the market in 2019. In another break from recent tradition, North America was in the most active region for Central London office investment in 2019, driven in large part by Citi’s acquisition of their own HQ at 25 Canada Square.

James Beckham, Head of Central London Investment, CBRE
2019 was a challenging year for the Central London office investment market. A lack of stock, coupled with heightened political uncertainty that persisted all year, resulted in more hesitancy from overseas investors. However, the surge in investment in December has heralded heightened levels of confidence which we expect to continue into 2020.”
James Beckham, Head of Central London Investment, CBRE