Thu, 27 Apr 2017 | COMMERCIAL PROPERTY
The run-up to the EU referendum saw European investors give London’s commercial property market a wide berth - but they are on their way back, ploughing more than £1 billion into the market this year so far.
A weak pound that has seen prices drop and a degree of certainty over property prices following the announcement of a snap election are working to make the UK a decent prospect for buyers, analysts say.
Savills said European investors have put £1.7 billion into central London real estate so far this year, accounting for 31 per cent of the market. That activity is double that of the same period in 2016, when investors spent £824 million on London commercial property.
Felix Rabeneck, director in the Savills’ central London investment team, said investors like London’s attractiveness as an “international marketplace” and a “safe haven” for capital.
“In spite of headwinds generated by Britain’s decision to leave the EU last year, the UK continues to look stable to overseas investors and comparatively more attractive than many other markets,” Rabeneck said.
“This, coupled with a fall in the value of Sterling, has led to a return in appetite from European investors.”
Speaking to Bloomberg, David Hutchings, head of European strategy at Cushman & Wakefield, said the snap election has stabilised, not upset, investor confidence.
“If anything, the snap election call in the UK decreases uncertainty regarding property values in London,” he said.
“If, as expected, May comes out stronger and in a better position to negotiate with the EU, our Brexit will be softer.”
Key deals so far this year include KanAm’s purchase of Evershed’s London offices at 1 Wood Street for £179 million, a consortium of institutional investors who acquired Olympia London for around £229 million and Deka Immobilien’s purchase of Cannon Place, EC4 for £485 million.
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