This article is from the Australian Property Journal archive
LONDON’S West End office investment market is alive again following some big ticket item sales, according to Savills.
Savills director Paul Cockburn said UK funds have made a strong return to London’s West End office investment market this year.
According to Savills, Q1 turnover was £690 million compared to only £235 million a year earlier.
Funds accounted for £185 million worth of deals over nine properties which help push yields on Savills prime yield index for West End office yields from 6% in March 2009 and to 4.5%.
|
|
2009 |
2010 |
|
2009 |
2010 |
|
|
Volume Marketed |
Deals |
|||
|
Jan |
59.4 |
532.8 |
8 |
19 |
|
|
Feb |
125.6 |
453.4 |
8 |
18 |
|
|
Mar |
143.8 |
253.7 |
7 |
19 |
|
|
|
328.8 |
1239.9 |
23 |
56 |
|
|
|
|
||||
|
|
Volume Deals Done |
Deals |
|||
|
Volume |
235.3 |
692.3 |
14 |
28 |
|
|
|
|
||||
|
|
UK Inst Deals Done |
Deals |
|||
|
Purchases |
8 |
185.4 |
1 |
9 |
|
|
Sales |
186.8 |
77.2 |
|
8 |
5 |
Source: Savills UK
“This is in stark contrast to a year ago when the same period was characterised by subdued activity,” he added.
“A year ago the funds were still huge net sellers and so it’s no surprise their switch to buying has led to a dramatic pricing turn around,” he added.
Cockburn acknowledged that whilst the volume of deals available has increased from last year, the trend these last few months has in fact been falling.
He added that it may be still too early to suggest a comeback due to the lack of supply.
“This is interesting since most commentators expected over-supply to be a catalyst for ‘double-dip’ and we are seeing the opposite, with buyers still being disappointed by the level of new opportunities,” he concluded.
Australian Property Journal
