Commercial property hits £11bn milestone in London

INVESTMENT in commercial property in central London has topped £11bn so far this year, as the City market saw its strongest trading in a decade.

According to data from property agency Savills, £2.35bn was invested in central London’s commercial property in July alone, taking total turnover for 2017 to the end of July to £11.5bn, 24pc more than the same point last year.

July was the strongest month recorded since March 2007 for the City, where £2.1bn worth of property changed hands. This number was boosted by the sale of 20 Fenchurch Street, known as the Walkie Talkie, which was sold for £1.28bn to Hong Kong-based Infinitus Property Group.

In London’s West End market, £252m was transacted in the same month, with the largest deal the sale of a building on the Strand, for £68.25m.

Asian investors have continued to dominate the market, accounting for 63pc of total City turnover in the year so far, followed by European investors at 17pc and UK investors at 11pc. In the West End market, Asian investors accounted for approximately 50pc of turnover to the end of July, with UK institutions accounting for just 2pc of acquisitions by value.

Stephen Down, head of the Savills central London investment team, said the value of deals for 2017 as a whole could surpass last year’s total of around £17bn. He added: “Although the restrictions announced earlier in August by the Chinese government will reduce real estate investment from mainland Chinese property developers and institutions, investors from Hong Kong, who have been particularly busy in the market in the past year, are likely to continue to be active.

“However, we have noticed their buying criteria has become increasingly selective.”