• Kevin Murphy

London Ranks First In Commercial Real Estate Investment

The numbers are in and they show that despite Brexit London is the top choice for commercial real estate investment. Knight Frank is reporting that £16.2 billion was invested in London in 2018 with £14.3 billion in Manhattan, £12.1 billion in Paris and Hong Kong at £8.4 billion.

For 2017 the investment volumes in central London decreased but for 2018 the average transaction for was a £81.5 million with a total investment for the year at £40 billion this year in a review by PropertyWire.

Canary Wharf, London

The majority of the investments have mostly been by Greater China with 21% of the total investment activity for central London with £3.48 billion in 2018. But the amount in invested for 2018 was actually a 51% decrease from 2017 when total transactions hit a record at £7.12 billion. For 2019 Greater China will be the largest investor in commercial property in London with an expected increase of 25% or £10 billion.

A significant increase in London commercial real estate investment was by South Korea with £2.56 billion up substantially from £300 million invested in 2017. For the remainder of Far East investments accounted for 47% of total investment transactions or £7.67 billion in 2018.

Nick Braybrook, head of central London capital markets at Knight Frank:

‘Although 2019 presents ongoing challenges, international investors remain undeterred. Our Global Capital Tracker identifies £40 billion still targeting London this year, with some seeing the political turbulence and currency weakness as an opportunity, combined with the strong occupational market fundamentals.'

‘Whilst demand from Greater China has reduced, they were still very active in 2018. The reduction is also partly countered by increases in demand from Singapore and Japan, and interestingly the tracker shows an increase in domestic demand this year. Domestic demand is often the first to react to improvements in occupier market trends.'

William Beardmore-Gray, head of central London at Knight Frank, reports that London's popularity is a result of its ability to meet the ever changing demands of the modern global economy.

‘Big banks like Deutsche, tech giants like Apple and Facebook and life sciences groups like GSK are the heartbeat of our capital. The growth in co-working space is a positive sign of London’s dynamism and the vitality of the creative economy. London’s resilience and reputation as a safe haven for investment, despite Brexit, is remarkable.'

'We see further positive transformation in the pipeline, as London is set to become a centre of scientific research and development and will draw capital from new investors unknown to the market before. London’s potential continues to grow, with new sub-markets emerging in Nine Elms, Stratford and White City.'

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