London's City and West End markets both witnessed increased activity from overseas investors during 2011, which is set to continue throughout 2012 as the UK capital retains its ‘safe-haven’ status, according to property adviser Savills.
London's City and West End markets both witnessed increased activity from overseas investors during 2011, which is set to continue throughout 2012 as the UK capital retains its ‘safe-haven’ status, according to property adviser Savills.
The firm said that non-domestic investors accounted for 64% and 60% of total turnover in the City and West End markets respectively, which is above average compared to previous years. Savills noted that while turbulence continues in the wider global economy regarding commodity prices, equity markets and political uncertainty, the high levels of overseas interest will be sustained.
When assessing the specific markets, Savills said the character of the non-domestic investor in the City is different to that of the West End with international buyers in this market tending to be sovereign or state investors.
The two markets are also different in terms of the size of transactions with the West End highlighting an increase in the number of larger transactions such as 1 Kingdom Street, Bond Street portfolio and 1 Berkeley Street. A total of 15 deals in the £100 mln or over bracket were recorded in 2011, of which 82% by volume were by overseas investors.
In comparison, the City market saw just 16 deals in the same size bracket, which is lower than the five-year average of 17. It was the £50 mln and below bracket that dominated this market. The firm also reports an increase in UK sellers from 44% in 2010 to 62% during 2011 in London's City market. Savills states that 95% of overall sellers in London’s city market in 2011 were UK, Irish, German and US landlords. It expects this trend to continue into 2012.
