Commercial property transactions in central London of £2.9 billion during November, took the figure for the year to date to £15.4 billion, according to DTZ.
With ‘under offers’ currently standing at £3.8 billion, and other properties at ‘best bids’, this year is on course to be one of the most active ever in the central London market, although the volume is expected to fall short of the £22.4 billion recorded in 2013.
The largest transaction during November was the £725 million sale of the Gherkin to the Safra family. In the West End, Northacre paid £350 million for the former Metropolitan Police headquarters at 10 Broadway.
In total there were eight transactions at £100 million or over, while the fact that three out of four £100 million plus City deals were off-market, reflects the continuing shortage of high-value stock making it to the open market.
A key factor in this high investment volume is that London continues to offer good prospects for income growth, with a number of submarkets seeing double-digit rental growth this year.
Over the past few months record rents have been achieved in the City and King’s Cross, while in the West End oil giant Trafigura is in advanced talks over prime Berkeley Square space at a reported price of £150 per sq ft. If this deal is concluded it will be the highest rent ever paid for office space in the UK.
Ben Cook, Head of UK Inward Investment at DTZ, said: “We continue to see strong demand for core assets in the capital from both institutional and private investors.
“For those seeking prime office assets above £200 million, there are relatively few markets in Europe that offer the size and liquidity of central London.”
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Definitely looks like one of the most active periods of investment in London. Thus, causing the property bubble effecting Londoners by forcing them to move to more affordable, commuting areas. It will be interesting to analyse how the market will plan out in the forth coming months…