Central London attracts €17.9b of property deals so far in 2014

Central London chalked up commercial property transactions worth a total £1.2 bn (€1.5 bn) in October, lifting the year-to-date total to £14 bn (€17.9 bn), according to DTZ.

The figures cover all commercial property investment transactions with the exception of hotels. Available stock, including lots under offer or at best bids, totals £6.9 bn, a similar amount to October 2013. This includes £1.6 bn in just three buildings including the HSBC building and Tower Place. The sale of such large lots will significantly impact the 2014 total should they complete before the end of the year, the property adviser said.

Foreign investors accounted for 64% of the year-to-date investment volume, which remains higher than the 10-year average of 57%. Foreign investors continue to dominate £100 mln-plus transactions, accounting for £6.8 bn of the £8.1 bn total (33 out of 39 transactions) so far in 2014.

Investors from Asia Pacific still dominate, reflecting a more general trend across Europe as a whole. They accounted for a 27% share (or £2.4 bn) so far this year, the fourth year in which they have taken a quarter or more of annual investment from overseas.

October saw the largest single transaction so far in 2014 when Norges Bank Investment Management (acting for the Norway Government Pension fund Global) bought Bank of America Merrill Lynch’s City headquarters in EC1 from GIC Real Estate for £583 mln. This follows the sovereign wealth fund’s acquisition of a 58% share (£343 mln) of the Pollen Estate in a joint venture with the Crown Estate over the summer.

Sophy Moffat, Central London researcher at DTZ, commented: 'There is £1.6 bn under offer in just three buildings. The sale of such large lots will significantly impact the 2014 total should they complete before the end of the year. A return of occupier confidence and signs of real rental growth returning to the Central London occupational market are continuing to attract inward investment from domestic and international investors alike.'