City property deals top £1bn during last quarter, thanks to foreign buyers
OVERSEAS investors looking for stable assets ratcheted the value of commercial property deals in the City by 57 per cent to £1.1bn in the last quarter, according to research published yesterday.
A further £1.1bn worth of property in the Square Mile and Docklands is under offer with sales set for the third quarter of 2010, said real estate firm Cushman & Wakefield.
Foreign investors accounted for 60 per cent of central London deals in the last quarter. Bow Bells House on Cheapside, which was sold to a private overseas investor for £140m on Friday, is a high-value example.
Around £4.45bn of commercial property deals have been done in central London so far this year, more than double the first half of last year.
The West End has seen a leap of 94 per cent in the total value of transactions in the last quarter, to £1.68bn.
Cushman’s head of central London investment, Clive Bull, said: “It is regarded as a relatively safe and stable home for equity in an uncertain environment where returns of other asset classes remain extremely low. Rents look set to climb, fuelled by demand in the retail sector and a lack of quality office supply.” The jump in demand has been echoed in most financial centres, according to property investment fund PRUPIM.
“Though largely confined to well-located, prime assets let to tenants with good covenants on longer leases,” it adds.