Asian Investment into London office market grows 150% in 2011

By Bridging Loan Directory -

Asian investors accounted for GBP1.7 billion worth of transactions in Central London’s office investment market during 2011, compared to GBP668 million in 2010; a 150 per cent increase, according to Jones Lang LaSalle and reported by Property Funds World.

Total investment volumes in the Central London office market reached GBP10.8 billion in 2011. International buyers represented 60 percent (GBP6.4 billion) of total investment volumes with Asian buyers accounting for 16 percent last year, compared to 6 percent in 2010.

Alistair Meadows, Head of Jones Lang LaSalle’s International Capital Group, Asia Pacific, said:

“During 2011 we have seen Asian investment into London more than double. What has been evident is the emergence of ‘new’ sources of Asian capital attracted to London ranging from pension funds like EPF & PNB from Malaysia to Ultra High Net Worth (UHNW) investors like Khoon Hong Kuok and Martua Sitorus who acquired ‘Aviva Tower’ in the City of London for GBP288m.

“Asian buyers were especially dominant in the City of London office market, accounting for 23 percent of annual investment volumes. Indeed, of the GBP3.5 billion traded in the City office market last year in lot sizes over GBP100 million, 40 percent was undertaken by Asian buyers. We predict seeing a diverse range of Asian investors being very active in London in 2012 and likely to account for over 20 percent of investment volumes by year end.”

Andrew Hawkins, Director in the City of London Investment team at Jones Lang LaSalle UK, said:

“Over the next 12 months Asian money will also continue to target the City for higher income returns, and the West End for long-term wealth preservation, reinforcing London’s perception as a safe haven. Already in 2012 Malaysian capital is rumoured to have placed the majority of a major German portfolio under offer in the City. London’s transparency, relatively long leases and high yield spread above the risk free rate, continues to be attractive to Asian Capital seeking to diversify away from their home markets. We see this as a long term trend.”