Sep

London commercial property sees strongest trading in 10 years

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Record Commercial Sales:

London commercial property has hit an £llbn record so far this year, with the City of London seeing it’s strongest trading in a decade.

Savills, the property agency and consultancy, has produced data which shows July turnover was £2.1bn across 11 deals, equating to an average lot size of £190.92m. The sale of The Walkie-Talkie, 20 Fenchurch Street, EC3 accounted for 61% of July’s turnover. Total turnover for the year has now reached £7.4bn across 77 deals (£96.10m average lot size), which is 51% up on this point last year. The rolling 12-month total turnover is currently £10.6bn, 41% up on the long-term average.

In the City market, Savills say they are currently monitoring 57 investment opportunities totalling circa £4.1bn. Of which, 22 are currently under-offer totalling circa £0.8bn, leaving an estimated £3.3bn worth of available opportunities. The 10 largest available assets account for 75% of total availability.

In London’s West End market, £262m was transacted in the same month, with the largest deal the sale of a building on the Strand, for £68.25m.

Asian investors continue to dominate the market, accounting for 63pc of total City turnover year-to-date, followed by European investors, at 17pc and UK investors at ll%. In the West End market, Asian investors accounted for approximately 50pc of turnover to end July, with UK institutions accounting for just 2pc of acquisitions by value.

Savills prime City yield remains at 4.00%. The spread between the City and the West End is still just 75bps with the West End prime yield currently at 3.25%

Stephen Down, head of the Savills central London investment team, told the Daily Telegraph that the value of deals for 2017 as a whole could surpass last year’s total of around £17bn:

“Although the restrictions announced earlier in August by the Chinese government will reduce £2.35bn. However, we have noticed their buying criteria has become increasingly selective.”

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