The amount of Asian capital invested into City of London offices has hit a record volume for the first half of the year with £3.39 bn (€3.85 bn) transacted in the year to date, according to the latest figures from Savills.
The figure represents around 70% of the total investment volume of £4.90 bn, according to the broker.
The record level of investment by Asian buyers in the first half of 2018 outstrips activity for the same period in 2017 (£2.8 bn, 54% market share) despite The Leadenhall Building trading for £1.15 bn to a private investor from Hong Kong. On average, Savills data shows investors from Asia spend £1.83 bn on City offices in the first half of any given year.
Key deals include: the sale of Ropemaker Place for circa £650 mln to HoBee Land; 5 Broadgate to CK Asset Holdings for £1 bn; 20 Old Bailey to Mirae Asset Management for £341 mln; Royal Mint Court for circa £200 mln to the People’s Republic of China and Cannon Bridge House to Mirae Asset Daewoo and NH Investments & Securities for £248 mln.
Stephen Down, head of central London investment at Savills, commented: 'Investment volumes in the City of London reflect the ongoing level of investor demand, particularly in this case, from Asian origin. It’s further positive news for London but arguably not a surprise, despite headlines to suggest the market is turning.'
He added: 'London’s property market is made up of sophisticated investors who know what value is. Where we saw sales fail at the end of 2017 was around overambitious pricing with some ‘non-core assets’ being marketed with ‘core’ values – this was never sustainable. These failed sales were misinterpreted by some as signalling a slowdown in the London market however activity in 2018 demonstrates that the depth of demand is as strong as ever, so long as investors ensure pricing is realistic. HoBee Land and CK Asset Holdings, purchasers of Ropemaker Place and 5 Broadgate respectively, are both seasoned buyers and evidence that the above is true.'