PRIVATE INVESTORS SEIZE OPPORTUNITIES IN LONDON FOLLOWING REFERENDUM
Private investors, both domestic and overseas, have been looking to London to secure real estate assets ahead of institutional buyers. According to CBRE, the average transaction value following the referendum is £45.6 million, as small to mid-size deals dominated transaction volumes in Q3. The currency depreciation in the UK since June, coupled with the attractive return profile of real estate relative to other asset classes, has provided a window of opportunity for high net worth investors and private wealth to act first and most quickly, buying smaller assets in core locations within the City and its fringe.
Global real estate advisor, CBRE, has advised on a number of sales of this nature in the aftermath of the vote; most recently, the acquisition of St Paul’s House in EC4, a recently refurbished 37,000 sq ft office building purchased by a Turkish family for £34.5 million. Additionally, Creechurch House, Bevis Marks was sold by CBRE on behalf of Columbia Threadneedle Investments. The 28, 813 sq ft, eight storey building was purchased by the City of London Corporation at a price of £15.4 million, offering a potential to redevelop in a core EC3 location.
“London is currently looking attractive to overseas investors given the weaker sterling and comparative returns relative to other European cities. Most take the view that London will always be a major global City, supported by a rising population, long term growth, strong real estate fundamentals and constrained occupational supply.
The uncertainty following the referendum vote saw a pause in institutional buying and created a window of opportunity for smaller, private investors to access the market. However, as we enter a more stabilised period in Q4 and with increasing evidence of larger deal activity again, such as 20 Moorgate which completed last week, the institutional sector is very much back in the mix.