Central London’s office investment market is hotting up according to new research, with deal volumes in the third quarter hitting £2.5bn.
CBRE data shows investment deals for the year-to-date reaching £6.4bn – nearly double the figure for the same time last year, when Covid-19 restrictions severely dampened activity.
The London investment market has been dominated by core transactions, which represented 60% of total volumes in the first nine months of the year, the agency said.
Furthermore, European capital has emerged as the dominant source of equity deployed in London. European investors invested more than £1bn in Q3 2021, and account for 34% of the year-to-date total.
Asian capital, once the predominant capital source in London, remains challenged as a result of the pandemic and has accounted for just 15% of the year-to-date investment total.
James Beckham, head of central London investment at CBRE, said: “We have certainly seen a bounce back in the investment market as the year has progressed.
“However, until Asian investors can once again freely deploy capital, we are unlikely to reach the record volumes we saw in 2018 and 2019.
“Buyers are focused on the best buildings with superior ESG credentials, but grade-A stock is undersupplied and as a result, investors are showing renewed appetite for development risk.”
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