London investment volumes reach £4.1 billion in Q4 2016, the strongest quarter since Q4 2015

Investment volumes in London jumped to £4.1 billion in Q4 2016, according to the latest Property Perspective report from global real estate advisor, CBRE. This represented the strongest quarter since Q4 2015, meaning total volumes for the year reached £13.1 billion. Whilst this does represent a fall in volumes from the previous year, this was largely due to the effect of the referendum on the Q3 totals, which were the weakest since 2011.

According to the report, the rise in volumes was also reflected in the number of transactions, which increased from 42 in Q3 2016 to 66 in Q4 2016. Eleven of these deals were over £100 million. Additionally, 75 per cent of total Q4 volumes and 93 per cent of transactions over £100 million were completed by overseas buyers as previous concerns around the referendum result dissipated. Overseas investors consequently accounted for 70 per cent of total volumes in 2016, their most active year since 2013.

Asian buyers were the most active party, accounting for 25 per cent of total volumes, closely followed by Middle Eastern investors. The devaluation of sterling certainly underpinned the attractiveness of the London office market, having fallen 19 per cent against the US dollar and 16 per cent against the Hong Kong dollar over the course of the year.

Chris Brett, Head of International Capital Markets, CBRE UK
Previous market uncertainty following the referendum result certainly showed clear signs of having subsided in Q4 2016 and overseas buyers returned to London with force. Not only did the number of transactions increase but the number of sizeable transactions was also much higher, highlighting investors’ confidence in London and its status as a global safe haven. London remains a key target for those seeking wealth preservation strategies and we expect the fall in sterling to continue to make UK real estate remain particularly attractive to overseas investors over the coming year.
Chris Brett, Head of International Capital Markets, CBRE UK