The temperature of London’s commercial property market is rising as buyers from the Asia Pacific region snap up prime city assets.
The third quarter (Q3) of 2017 saw investment of £4.82 billion (€5.4 billion) in central London’s commercial property market, up from £3.1 billion in Q3 last year.
The figure is also over the £4.41 billion worth of deals in Q2, according to property asset manager, Cushman & Wakefield. This takes the total investment in London in the first three quarters of 2017 to £13.65 billion.
City of London transactions in Q3 totaled £3.25 billion and the trend of acquisitions from Asia Pacific investors continued, with investment from the region accounting for a 74% share of total outlay in the City’s commercial property market.
This figure was boosted substantially by the purchase of 20 Fenchurch Street – otherwise known as the ‘Walkie Talkie’ building – which was acquired by Infinitus Property Investment (Hong Kong) Limited, a wholly-owned subsidiary of LKK Health Products Group, for £1.285 billion in July, a record for a single building in the UK.
This was one of four purchases by Hong Kong-based investors in Q3 for £250 million or more.
On the sell side, UK vendors dominated marking a noticeable shift in the market from UK to Asia Pacific ownership.
Martin Lay, joint head of London capital markets at Cushman & Wakefield, said: “The weight of money from Asia Pacific shows no signs of abating and the high levels of liquidity in the market are reflected in the average lot size in the City increasing to £116 million in Q3.
“With over £6 billion of available stock currently on the market in the City we expect further strong investor activity in the final quarter of the year, leading to total investment volumes in 2017 significantly outstripping last year.”
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