It seems the already-worrying Brexit negotiations aren’t being seen as doom and gloom for those with an eye on property investment in the UK. Or at least, those looking to snap up a piece of the capital, anyway.
According to the latest figures from Cushman & Wakefield, total commercial property investment in London for the first six months of 2017 came out at just under £9 billion. Or to put it another way, a full 18 per cent more than recorded during the same period last year. Even as political turmoil grips Westminster and Brussels alike, London clearly remains a top-pick among investors.
During the first six months of 2016, £7.45 billion was transacted on London’s commercial property market. This year, the figure soared to an impressive £8.83 billion.
As predicted, the lion’s share of the investment capital and activity came from the Far East. Cumulatively, China, Singapore and Hong Kong invested £4.07 billion on commercial property in London – 46 per cent of the total investment tally for the period. Beating all expectations, H1 proved to be the most active time for Asia Pacific investors buying into London since 2012.
Just a few of the most prominent acquisitions included One Kingdom Street and the Leadenhall Building – aka the Cheesegrater – which were snapped up by CC Land of Hong Kong. China Resources Land purchased 20 Gresham Street, while Singapore’s Ho Bee Land acquired 67 Lombard Street.
‘There are push and pull factors behind all global capital flows, so the recent high-profile visit to Hong Kong by the Chinese President to mark the 20th anniversary of the handover is a timely reminder of the region’s impact,’ says head of London capital markets at Cushman & Wakefield, James Beckham.
‘Asia Pac investors from across the entire region dominated the London market in the first half of this year and are set to continue with strong ongoing interest in assets right across the risk spectrum.’
Along with heavy interest from far-eastern investors, there was also plenty of activity from German investors with an eye on the capital. Three of the deals that took place during H1 among European investors valued at more than £200 involved German investors. 2&3 Bankside was purchased by Deutsche Asset Management for £310 million – the deal was overseen by Cushman & Wakefield.
Of course, it will be interesting to see if and how things continue to play out two years from now, when it becomes clear what kind of Brexit deal the UK can expect. For EU investors looking to buy into the UK and British commercial property investors alike, the landscape could suddenly shift more drastically than ever before. At the same time, new deals struck with non-EU nations globally could have a marked impact on how the UK is viewed as a commercial property investment opportunity.
Further reading on property
