Investment in the commercial real-estate sector in London is set to achieve a new record this year. This is a direct result of the influx of international buyers that are flocking to the capital.
Property adviser and real estate authority Savills is predicting that the overall volume of the transactions in the real estate market just in central London alone for this year is expected to go well beyond £20 billion. This means that the chances of it ending the year with figures higher than the record level that was set back in 2014 at £21.6 billion are indeed quite high.
The first three quarters of the year has seen a considerable growth in the transactions for commercial property in the central London area. The records show that the transactions have amounted to £14.2 billion. This is a record set by buyers that originated from a whopping 27 different countries. For the last 5 years, the capital has averaged a turnover of £6.6 billion. This has led Savills to set the prediction of the 2017 turnover to easily surpass the £20 billion thresholds and will likely be well on its way to set a new record.
Investment in commercial property in the city alone is expected to likely reach and even beat the 2014 record of £12.6 billion. The Square Mile investment for this year’s first three quarters has already outperformed the overall total for the year 2016. The volume of the sale is quite notable in September as it hits £8.5 billion at the end of the month. This is higher by six percent than the annual total for 2016 at £8.07 billion.
Savills’ Stephen Down stated that the real estate in the UK, particularly the prime assets in the capital with strong streams of income, has always appealed to a wide spectrum of investors in the international arena and it has continued to do so. Outside this particular sphere, there is also demand from a broad base of professional investors as long as the properties involved are being marketed at the right prices.
Numis Securities Director Robbie Duncan said that the volume of transaction in a commercial property market that has been recorded for this pear is quite fantastic. This further backed the fact that even after the EU referendum that took place last year, London has definitely not closed for business. Still, it is important to take into perspective that the sale of the Walkie Talkie and the Cheesegrater, two of the biggest buildings in the city, makes up for a huge part of the investment.
Duncan has also predicted that investors from Japan that are looking to diversify their portfolios are likely to explore the opportunities for investment in the capital next year. Still, the sector does require clarity, especially over the transition deal after Brexit, if it is going to maintain the high level of investment that it is clearly experiencing.