Prime yields in the City and London’s West End will begin to move in by the end of Q3, according to Jones Lang LaSalle.
Following a positive responseto its Q2 Real Estate Investor Confidence Survey, the agent said that, by the end of September, it expected yields in the Square Mile to move in from 6.75% to 6.5% and, in the West End, from 5.75% to below 5.5%.
JLL’s managing director of London markets, Julian Stocks, said: “In terms of prime assets let on long leases to strong covenants, we’re through the bottom and have seen an inward yield shift in the last month for property that meets this criteria.Investor interest has been directed mainly at assets of less than£40m, where high net-worth individuals andGerman funds are active.”
The agent’s survey of almost 200 principals and lenders showed, for the first time since the beginning of last year, anupswing in confidence. It found that the net balance had improved from -22 in Q1 to +32 in Q2. The percentage of “less confident” responses fell from 40% to 10% during the period.
Half of all respondents also said that they expectedhigher returns in 2009.
