Overseas investment

Overseas capital drives central London office investment



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Overseas investment into the central London office market represented 79% of all such market activity in Q1 2018, according to a new study.

Research by global real estate adviser CBRE has revealed that overseas investors were involved in more than 83% of all central London office transactions over the last 12 months.

Asian investors were involved in 52% of all such transactions in Q1 2018, representing £1.3bn.

Overall, investment into central London offices slowed in Q1 2018 to £2.5bn, down 29% on Q4 2017 and 50% on Q1 2017.

James Beckham, head of London investment properties at CBRE, said: “We have seen a strengthening of sterling in recent months and so the comparative pricing advantage London offered in the months following the referendum has lessened.

“Demand from overseas investors remains exceptionally strong, but as you might expect from this stage in the cycle, investors are focusing on pricing and yields, and some investors are seeking to hold income in the short term, resulting in lower levels of new stock coming to the market.

 “While prime yields remain below levels recorded at previous peaks of the market, the sector remains favourably priced when compared to other asset classes and with a global hunt for income, the London market continues to be a major draw for global investors.”

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