The end of 2013 figures are in and it appears that Central London commercial property transactions totaled £19.9bn in 2013. According to Cushman & Wakefield this is the highest figure since 2007. To give you a year on year comparison this figure is a 47% increase on 2012’s total of £13.5bn.
In the City & Docklands, total investment in Q4 2013 reached £5.6bn, taking total investment for the area in 2013 to £11.9bn, reports the agent.
From a purchaser perspective in the final quarter, overseas investors in the City & Docklands remain the most active. 12 transactions accounted for 80% of market share, equating to £4.5bn. It must be noted that this statistic is affected by the purchase of More London by Kuwaiti overseas sovereign fund St Martins (Kuwait Investment Authority) for £1.7bn. In addition, GIC, Singapore’s sovereign wealth fund acquired a 50% stake in Broadgate, also for £1.7bn.
Cushman said the UK investor market in the City & Docklands was very active in Q4, with 26 purchaser transactions totalling £1.1bn, or 19% of Q4 market volume. The average deal being £42m. Total investor volume was “hugely reliant” on a few significant deals such as More London, Broadgate and the St Botolph Building (£464m).
The top five deals for the final quarter of 2013 account for around 77% of total City & Docklands investment. Cushman highlights the importance of the number of very large transactions which have contributed to the total volume. This indicates a strengthening commercial property market from large international institutions. Following on from this turnover for the first quarter of 2014 is likely to be strong in the City & Docklands market with the level of acquisitions currently under offer amounting to approximately another £1.3bn across approximately 30 transactions.
Mike Tremayne, head of West End investment at Cushman & Wakefield, said: “The outlook for 2014 is very positive. With a continuing mismatch between high levels of investor demand and inefficient supply, we see no sign of this competitive market abating.”