Investment in central London offices has shown some signs of recovery after a dire end to last year, according to new analysis from CBRE.
Investment reached £1.65bn over the first quarter of 2023, the agency said, more than double that of the final three months of 2022, the lowest level on record.
Nonetheless, the Q1 figures remain a far cry from the record start to 2022, when £5.1bn of deals were sealed.
Asian capital accounted for three-quarters of all purchasing activity and all of the deals valued at more than £85m, including the purchase of St Katharine Docks by CDL, GIC’s £1bn joint venture partnership at Tribeca in Kings Cross, Obayashi’s acquisition of 60 Gracechurch Street and Gamuda’s acquisition of Winchester House.
Ed Bradley, CBRE’s head of London capital markets, said: “Following a sharp repricing of office values in Q4 2022, we are once again seeing significant interest from Asian investors, both from established groups as well as new entrants. We are expecting Asian investors to lead the rebound in investment volumes, attracted by the long-term fundamentals and relative strength of the occupier market compared with other global office markets.”
Bradley added: “Despite higher interest rates creating challenges in the debt market, investment volumes have been sustained by equity, thanks to the diversity of the buyer pool in London. As liquidity returns to the debt market and business and consumer confidence rebound, we should see volumes in lot sizes over £100m increase.”
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