Volume of City Transactions Up

The value of transactions for real estate investment assets in London City increased significantly in May, compared to April...

The value of transactions for real estate investment assets in London City increased significantly in May, compared to April. In its latest City Investment Watch, Savills revealed the total volume of deals totalled GBP 1.36 billion in May, up from the GBP 304 million recorded in April. The largest single transaction was the sale of Plantation Place to Brazilian banking mogul Moise Safra for GBP 470 million, at a yield of around 5.5 per cent. The anchor tenant in the city office development is Accenture.

Other large deals concluded in May include the GBP 340 million purchase of Devonshire Square by Blackstone and the sale of Drapers Gardens to RREEF for GBP 286 million. Savills pointed out the majority of available investments are between GBP ten and 25 million, although supply of assets of all sizes is constrained in the City district. The firm also expects the number of transactions to drop over the summer due to the London 2012 Olympic Games, with many potential buyers expressing a desire to complete their deals before the start of the sporting event.

Private equity and overseas real estate investors were the most active groups in the City market during May, with Savills stating funds based in the UK are taking a "cautious approach" to new property investments. According to the organisation, value-added investments are the main target for those with money to spend, and the report revealed it has been instructed on a number of projects that require asset management or refurbishment.

There have also been some notable City real estate transactions in June, with Hammerson announcing last month that it had sold the majority of its office portfolio to Brookfield Office Properties for GBP 518 million. This includes 99 Bishopsgate, Leadenhall Court, a 50 per cent stake in 125 Old Broad Street and a development site at Principal Place, which has been earmarked for a mixed-use commercial and residential scheme.

- Wednesday 04 July 2012

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