2014’s largest transaction takes Central London investment to £14bn

By Bridging Loan Directory 5th November 2014

Central London commercial property transactions reached £1.2bn in October meaning the year-to-date total is now £14bn, according to DTZ.

The figures cover all commercial property investment transactions apart from hotels. Available stock, and lots under offer or at best bids, totals £6.9bn, a similar total to this time last year. This includes £1.6bn in just three buildings including the HSBC building and Tower Place. Sale of such large lots will significantly impact the 2014 total should they complete before the end of the year.

Foreign investors accounted for 64 per cent for the year-to-date total, which remains higher than the 10 year average of 57 per cent. Foreign investors continue to dominate GBP100m plus transactions, accounting for £6.8bn of the £8.1bn total (33 out of 39 transactions) so far in 2014. Investors from Asia Pacific still dominate, reflecting a more general trend across Europe as a whole. They accounted for a 27 per cent share (or GBP2.4bn) so far this year, the fourth year in which they have taken a quarter or more of annual investment from overseas.

October saw the largest single transaction this year when Norges Bank IM bought Bank of America Merrill Lynch’s City headquarters in EC1 from GIC Real Estate for £583m. This follows the sovereign wealth fund’s acquisition of a 58 per cent share (£343m) of the Pollen Estate in a joint venture with the Crown Estate over the summer.

Sophy Moffat, Central London research at DTZ, said:

“There is £1.6bn under offer in just three buildings. Sale of such large lots will significantly impact the 2014 total should they complete before the end of the year. A return of occupier confidence and signs of real rental growth returning to the Central London occupational market are continuing to attract inward investment from domestic and international investors alike.”