OVERSEAS INVESTORS CONTINUE TO SHORE UP CENTRAL LONDON INVESTMENT
Overseas investment accounted for 70% of all office transactions in Q1 2019
For the third year running, overseas buyers were the dominant force in the Central London investment market in Q1 2019, according to global real estate advisor, CBRE. Overseas investors were behind 70% of deals in the first quarter of the year and have accounted for more than 74% of all transactions over the last 12 months.
Capital transactions in the Central London office market totalled £2.4bn in Q1 2019, a 14% fall on the same period last year, reflecting a reduction in the number of large transactions. According to CBRE, the average lot size for transactions in Q1 2019 was £79m; notably lower than Q2 2018 and Q3 2018, which were £103m and £105m respectively.
In addition, there are currently £1.5 billion of transactions under offer in Central London.
We typically see lower investment volumes in the first quarter of the year, and 2019 is no exception. There is still significant appetite to invest in London and no shortage of capital available to deploy. However, as uncertainty around Brexit continues, we are seeing some signs of hesitancy from investors ahead of an agreement on the terms under which the UK will leave the EU. Pricing has held firm, with few vendors under stress to dispose of assets, and the relative value of London assets compared with many other prime cities across Europe continues to capture investor attention.