Square Mile beats West End to year’s first £100m+ office deal

The stock-starved City market had a successful June as real estate investment turnover reached £285.5m across nine deals – the best monthly performance of the year. The West End, meanwhile, hit £129m across 12 deals, with just half of the £1.53bn in assets marketed during Q1 having traded. Despite the City’s heady month, Savills’ Investment Watch research series found year-to-date turnover was still 70% below the average for the past five years and deal volumes are the lowest since 1996. The West End’s turnover similarly lagged averages for the past five and 10 years, sitting 10% and 40% lower respectively. The City can nonetheless lay claim to the first £100m-plus deal of the year. Investor Yellow Tree Group acquired the 114,041 sq ft mixed-use Herbal House at 8-10 Back Hill, EC1, for £101m. While the West End saw a higher number of transactions in June, each transaction reflected a price of £20m or below, with noteworthy deals such as DTZ Investment Management’s sale of 22 Soho Square, W1, to fellow investor Momeni for £16m. The outlook for the City is difficult as it continues to suffer from a dearth of available stock, even as an extra £120m of new marketed assets surfaced across six sites in June. West End cumulative annual office transaction volume rose 15% rise year-on-year as H1 turnover hit £1.96bn across 63 deals. But a scarcity of large deals meant the year-to-date average lot size stands at £31m – a third lower than the H1 average across the past decade. Image © City of London Corporation See which agents are doing the most deals in London >>