The central London commercial property investment market remained robust in 2011, despite widespread economic uncertainty, according to a new report by Cushman & Wakefield.
The central London commercial property investment market remained robust in 2011, despite widespread economic uncertainty, according to a new report by Cushman & Wakefield.
Total investment volumes reached £10.9bn (EUR 13.2bn) for the year which is an ‘encouraging jump’ on 2010’s total of £9.9 bn, the consultancy said. This confirms the UK capital’s standing as a ‘relatively safe and stable home for equity in an uncertain economic environment, where returns from other asset classes remain extremely low’.
The report shows demand from foreign high net-worth individuals, particularly those from the Far-East, continues to be strong and competition for prime retail assets in the West End remains fierce.
The majority of West End purchases (35%) in Q4 2011 were by overseas private investors - up from 30% in Q3 2011. In the City and Docklands areas, Asian investors - largely led by sovereign wealth funds - accounted for 30% of all deals in 2011, making up the majority of total overseas activity for the year (41%).
‘All markets will be tough in 2012 but we expect the West End to continue attracting overseas equity given the wealth preservation characteristics of the prime assets within this area,’ said Clive Bull, Head of Central London Investment at Cushman & Wakefield. ‘We are likely to see more activity from the opportunity funds, propcos and REITS as long as stock is economically-priced.'
