Investment in the South East office market reached £690m in the second quarter, pushing transactions in the first half of the year to more than £1bn.
Knight Frank said the Q2 sales figure was 59% higher than the five-year quarterly average.
The largest transaction during the period was AEP Investment Management’s £136m purchase of Trident Place in Hatfield from Goodmans.
Yields remain under pressure, reflecting the weight of money seeking South East office stock and a limited pipeline. Yields for prime 15-year income stand at 5.25%.
Tim Smither, partner national offices investment team at Knight Frank, said: “The substantial weight of money seeking South East office stock is expected to put further pressure on pricing over the remainder of 2014, with prime yields likely to harden to 5.00% by the year end, as domestic and overseas investors chase a very limited pipeline of stock at the prime end.”
joanna.bourke@estatesgazette.com
