A rise in large central London transactions, largely by Asian investors, restored the UK as Europe’s largest commercial real estate investment market in the second quarter of 2017.
According to research by Real Capital Analytics, transactions in the UK completed during the period April to June 2017 totalled €15.5bn (£13.9bn), a 12% increase from the total for the same period a year earlier.
This pushed the UK past Germany, the top investment market in Europe for the preceding three quarters.
The second quarter of 2016 was the weakest for the British market since 2010, owing to the uncertainty surrounding the referendum vote.
The largest transaction in London last quarter was CC Land’s €1.36bn purchase of the Leadenhall Building, EC3, the office tower in the City of London also known as the Cheesegrater.
A string of these large transactions lifted the average deal size in central London to the highest level on record even as the number of transactions fell 15% from the second quarter of 2016.
Tom Leahy, RCA’s senior director of EMEA analytics, said: “The past quarter was the strongest ever for investment from Asia into Europe and London benefited as the Continent’s deepest and most liquid market.
“Pricing in central London still looks attractive in relative terms for Asian investors, especially following the depreciation of sterling after the Brexit vote. The investment flows suggest that the investors are comfortable about prospects for London as a centre for business and finance once the UK leaves the EU.”
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