An Asian investment spree has helped to cement London’s position as the top office market in the world. Billions of pounds from China, Malaysia, Singapore and South Korea have been pouring into the capital pushing the market to levels not seen since before the recession.
Battersea Power Station was bought by a Malaysian consortium
Data from Real Capital Analytics reveals that £14.7 billion has been spent this year in the City, Docklands and the West End. This easily outstrips London’s closest rivals New York and Paris where acquisitions totalled £9.7 billion and £8.5 billion respectively. Even more encouraging is the fact that experts anticipate this trend growing further.
Tony McCurley, speaking on behalf of GM Real Estate, said; “This is just the first wave, there are many others to follow.
“There is huge interest in London from across Asia Pacific and we expect this to continue.”
The acquisition of Battersea Power Station by a Malaysian consortium in September is the most high profile deal the market has seen this year. The buyers plan a mixed use development of offices, shops and apartments, incorporating the existing building and surrounding land.
But this is just the tip of the iceberg. Malaysian investors have been behind three of the biggest five deals of 2012 boosting investment in London commercial property by 40 per cent. The annual total is expected to be close to the peak of £18 billion reached before the financial crash of 2007.
Mr McCurley explains that a large percentage of this investment has come from state pension funds diversifying their portfolios by looking overseas.
He continues; “London has been their first choice which has been assisted by the Eurozone crisis as that persuaded many to adopt a wait and see approach to Paris or Frankfurt.”
While this is good news for London, it is in stark contrast to other areas in the UK where economic uncertainty continues to delay an upturn in the market.
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