Overseas investors were the dominant factor in the third quarter of this year as investment activity in London's commercial property market rose again for the second consecutive quarter, according to new figures from Cushman & Wakefield.

Overseas investors were the dominant factor in the third quarter of this year as investment activity in London's commercial property market rose again for the second consecutive quarter, according to new figures from Cushman & Wakefield.

The brokers figures for Q3 show that £1.6 bn (about EUR 1.7 bn) was invested in central London's main West End and City & Docklands markets, an increase of over 12% on Q2’s total of £1.432 bn and a 29% rise on the same quarter last year. It is the first time the capital has delivered two quarters of consecutive growth since Q2 2007.

Cushman & Wakefield said the dominant buyers continue to be overseas investors attracted by the weak pound and the very attractive returns achievable resulting from London’s relatively rapid price correction compared to other markets across the world.

The West End again showed the biggest increase in activity with £909 mln invested; an increase of 24% on Q2’s total of £732 mln and up 32% on Q3 last year. There was no sign of the 'traditional' summer break with vendors keen to take advantage of the purchaser demand which has been building up throughout 2009.

In excess of 70% of all transactions were by non-UK buyers with London staying firmly on top of many international investors’ shopping lists. Reasons for this trend include the continuing weakness of the pound and the fact that the London/UK market has corrected more quickly than other global markets providing investors with relatively attractive returns, the adviser said.

Notable deals of the quarter include: the purchase of Portman House for £155 mln by the Libyan Investment Authority. Telstar House in Paddington, was purchased by Henderson from the Prudential for £74.5 mln and the Arup building on Fitzroy Street, acquired by the tenant for a price of £60 mln, an initial yield of just over 7%.