Domestic institutions and property companies head the ranks of top real estate buyers by volume in the UK during the first six months of 2014 despite the continued focus by global investors on London.

Domestic institutions and property companies head the ranks of top real estate buyers by volume in the UK during the first six months of 2014 despite the continued focus by global investors on London.

The property arm of insurer Legal & General headed ranking of largest spenders with 11 reported deals totalling over €1.7 bn, according to deal data analysed by PropertyEU Research.

In the largest Legal & General Property (LGP) acquired a portfolio of 41 retail/banking units, 10 office buildings and four industrial sites from Telereal Trillium for €665 mln. LGP also acquired a portfolio of 4,000 homes from Places for People for €300 mln as well as a shopping centre in Dundee and a logistics property in Milton Keynes for €150 mln and €145 mln respectively.

The next three top spenders in the UK market by volume are also domestic players. London-listed REIT Intu Properties ended on a volume in excess of €1 bn. The shopping centre giant announced three deals, including two of the top five largest transactions overall in the market during H1. These were the acquisition of 50% of Merry Hill shopping centre in Dudley in the West Midlands for €502 mln and a yield of 5.2%; and a shopping centre in Derby from Westfield for €478 mln, a yield of 7.5%.

M&G Real Estate - part of UK financial group Prudential - comes third in the ranking with 7 deals, mostly office properties, for €834 mln. Heading the spread of office investment beyond London M&G Real Estate acquired two office assets, comprising 46,000 m2, in Manchester for €382 mln.

Underlining both the attractiveness of dominant retail and increasing volume of big-ticket deals outside London, UK REIT Land Securities deployed its massive firepower to take a 30% stake in Bluewater, one of the largest out-of-town shopping centres in the UK, for £656 mln (€818 mln).

INTERNATIONAL
The others in the top-10 ranking of largest investors are all international. China Life, China’s largest commercial insurance group, heads this group. It teamed up with Qatar's sovereign wealth fund to acquire 10 Upper Bank Street from Canary Wharf Group in a €1 bn deal funded with both equity and bank debt provided by Barclays.

China Life Insurance is taking a 70% share in the asset, which is the headquarters of international law firm Clifford Chance, with Qatar Holding - part of the Qatar Investment Authority - buying 20%. Canary Wharf Group - the vendor - retained a 10% stake as well as the asset management of the asset.

The rest of the group of international top investors in the UK during H1 are all hail originally from the US, though they have European businesses and several may count European equity providers among their investor base. The four are: Tishman Speyer with a volume of €665 mln; Blackstone (at least €607 mln); Hines (€572 mln); Kennedy Wilson Europe Real Estate (€458 mln) and Invesco Real Estate (€337 mln).

The UK market attracted some €25 bn of investment during H1, figures from CBRE show, with the Q2 volume of €13.8 bn up 25% on the same period the year before. The top 10 investors accounted for almost €7.8 bn or 31% of the H1 volume.

See the September edition of PropertyEU Magazine and the next subscriber-only, online Deal Watch publication for more on the H1 deals