London commercial property investment rebounds in Q4
Despite a challenging year, investment turnover in London’s commercial property market recovered during the final quarter of 2019, with preliminary numbers showing a 15 per cent rise on Q3, to almost GBP2.8 billion, according to global property agent, Knight Frank.
Nick Braybrook, Head of London Capital Markets, days: “Investors have been circling the market in increasing numbers over the last few months, with international capital drawn in by attractive yields and the currency discount compared to other global cities.
“London’s perceived risk profile has improved tremendously through the second half of 2019 whilst geopolitical tensions in markets from Asia to the Middle East have eroded their relative attractiveness boosting the appeal of London. Pricing is going to rebound strongly in 2020, as the reduced risk is combined with stock shortages and a strengthening occupier market.”
Faisal Durrani, Head of London Commercial Research, adds: “The political uncertainty certainly dampened activity for most of 2019, but a shortage of assets for sale exacerbated this. With the decisive Conservative majority secured in the General Election last week, confidence is expected to rapidly return into the market, something investors have been hankering for.
“On the leasing front, businesses are continuing to expand, with the amount of office space required still outweighing the options available. And with more than half of all offices under construction already spoken for, upward rental pressure is likely to persist. By the end of 2023, we forecast new all-time high rents in sub markets like Mayfair and St. James’s of GBP125 per sq ft, while many other West End locations will breach the GBP100 per sq ft mark for the first time.”