Investment in Central London property reached £20.5 bn (€26.2 bn) in 2014, well above the 10-year annual average but down on the £22.4 bn in 2013 which went on record as the most active year ever, according to research by DTZ.

Investment in Central London property reached £20.5 bn (€26.2 bn) in 2014, well above the 10-year annual average but down on the £22.4 bn in 2013 which went on record as the most active year ever, according to research by DTZ.

Around £7.5 bn was transacted in Q4 2014 alone, making it the second-most active quarter on record. Although down on the 2013 figure, the year-end total of £20.5 bn for 2014 significantly exceeded the 10-year annual average of £14.8 bn.

International investors dominated the scene in 2014, accounting for almost two-thirds of turnover. Around half of overseas investment came from North America (22%) and Asia Pacific (21%). Taiwanese and Singaporean buyers were the most active from the Far East, each accounting for 5% of international investment into central London. China and Hong Kong accounted for 3% each.

DTZ said that with a record £89 bn currently targeting European commercial real estate, there is still strong demand for core assets in the UK capital from both institutional and private investors. Investors seeking prime office assets above £200 mln will find relatively few markets in Europe that offer the size and liquidity of central London, said Ben Cook, head of UK inward investment.

Martin Lay, head of Central London investment, added: ‘London continues to offer good prospects for investors seeking income growth. Given the large amount of capital currently targeting UK commercial real estate, we expect strong investment activity in the first half of 2015.’

For more on the prospects for the UK real estate market, see the article and video interviews from our Outlook 2015: Europe/UK & Asia Capital Flows investment briefing.