APAC capital leads central London office investment

Asia Pacific-based capital has accounted for 43% of total investment volumes into central London offices so far this year. Data from BNP Paribas Real Estate reveales APAC investment to date stands at £4.8bn, as overseas investors take advantage of the long-term investment fundamentals of the market and weakened pound. This eclipses activity from buyers in the UK (32%), Europe (7%), US (5%) and the Middle East (1%) in the same period. A total of £3.2bn was invested into central London offices in Q3 2022, according to the analysis, which showed the current volume for the year clocking in at £11.1bn, the highest Q1-Q3 figure since 2019. This is due to a number of large transactions in Q3 that helped push the average lot size for this year to a high of £115m, said BNP PRE. Around 2.51m sq ft of offices have been completed so far this year, of which 41.8% has been prelet. Fergus Keane, head of central London investment at BNP Paribas Real Estate, said: “Despite the challenging market conditions and turbulent economic backdrop, London offices are holding strong versus other core European markets. “In the absence of many UK institutions, overseas investors have dominated the market this year, accounting for circa 70% of investment volumes. Against the weakened pound, there’s a lot of investor firepower out there for well-located core assets which offer an attractive point of entry, lower vacancy rates and attractive yields.” He added: “Cash-rich high-net-worth overseas investors recognise that London is likely to be one of the first global locations to emerge from the current drift in market sentiment and are currently circling for opportunities. Asia Pacific investors have been at the forefront of this for most of the year, however, we’re now seeing US buyers, particularly on the private equity side, back in the market with capital to deploy.” Recent sizeable deals from Asia Pacific-based capital include the purchase of 21 Moorfields by Australia’s TCorp for £808.5m, the £718m purchase of The Scalpel by Singapore’s Ho Bee Land, and GIC Real Estate’s £694m purchase of a 75% stake in Paddington Central from British Land. US investment into the sector this year stands at £522m, benchmarked by the £370m purchase of 10-15 Newgate Street, EC1, by Goldman Sachs, with Greycoat.   To send feedback, e-mail chante.bohitige@eg.co.uk or tweet @bohitige or @EGPropertyNews Photo © Frans Ruiter/Unsplash See which agents are doing the most deals in the London submarkets >>