London “trophy” property deal values have risen 15% over the past 12 months, data from McBains shows.
The analysis of deals worth £100m or more shows that 48 deals were completed between July 2017 and June 2018. In total, the deals were worth £12.58bn.
This compares with 40 transactions worth £100m or more totalling around £10.89bn during the previous 12 months following the EU referendum from July 2016 to June 2017.
Two of the deals in the 12 months to June 2018 met or exceeded the £1bn mark, including 20 Fenchurch Street, the Walkie Talkie, which sold for £1.28bn – the UK’s largest ever single asset office deal.
Landsec and Canary Wharf Group sold the Walkie Talkie, EC3, in July to Hong Kong’s LKK Health Products Group.
Despite recent concerns around a no-deal Brexit, five of the top 10 deals were completed in the last three months, including the sale of 5 Broadgate for £1bn in June. British Land and GIC sold UBS’s London headquarters at 5 Broadgate, EC2, to the family trust of Li Ka-Shing, one of the world’s richest men.
Asian investment remains strong, comprising a 38% share of the market (18 deals) and accounting for 52% of total investment (£6.6bn). Hong Kong investors account for 10 out of the 18 transactions, with a total value of £3.6bn.
UK investors have also increased their presence, with their total volume of investment amounting to nearly £2.5bn. This represents 20% of the total, compared to 10% for deals worth £100m during the previous 12 month period.
Gareth Hird, McBains commercial director, said: “Despite reports of investors being cautious because of the extended Brexit negotiations and the associated uncertainty, the capital’s commercial property market – at least in terms of trophy assets – remains attractive to both overseas and domestic investors.
“As in 2016-2017, a large proportion of transactions involved overseas investors keen to cash in on the relative weakness of sterling, but this continued investment, regardless of these short-term factors, represents a vote of confidence in London as a global place to do business.”
Photo: Monkey Business Images/REX/Shutterstock
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