Commercial property investment by overseas buyers buoyed the London property market during the first half of 2012, according to new research. Foreign investors accounted for over three-quarters of all sales during the six-month period, with 27 per cent of all money spent coming from Asia alone.
Data from Jones Lang LaSalle revealed office investment volumes in the capital hit GBP 6 billion between January and June 2012, an increase of eight per cent compared to the same period in 2011. Prime rent prices in the City are currently GBP 55 per sq ft - unchanged for the sixth consecutive quarter - with 1.5 million sq ft of space taken up in the City in the first half of the year. West End rents are considerably higher at GBP 95 per sq ft, but take-up volumes were down 14 per cent to 1.2 million sq ft in this area of the capital. According to Colliers figures, total quarterly take-up across the capital in the first three months of 2012 stood at 2.2 million sq ft, the lowest level for almost three years.
By the end of 2012, total sales are expected to hit GBP 12 billion and head of London capital markets at Jones Lang LaSalle Damian Corbett noted prices are staying high thanks to "strong competition for core assets"."Demand continues to grow for good quality, well-let assets, as well as short income asset management opportunities," he explained. Mr Corbett added yields are under pressure in the City market as investors look to purchase quality properties rather than secondary stock, which is increasingly being discounted. Head of office agency at the real estate firm Neil Prime noted occupiers from some industries, notably insurance and technology, media and telecommunications, are looking to secure offices for the long term as they acknowledge supply is likely to be constrained in the future.
- Tuesday 19 June 2012