City investment levels tipped to hit record high

City of London investment volumes are expected to approach a record level of £12.5bn this year, according to Savills. Subject to deals currently under offer, exchanging or completing this will be double the 10-year average of £6.3bn. The all-time record of £12.6bn was set in 2014. The market has been buoyed by the weakness of sterling since the EU referendum, making London more attractive for overseas investors. Mat Oakley, head of European commercial research at Savills, says: “You are hard-pressed to find a negative market metric on the London office market at the moment, and that has been the biggest surprise of the post-referendum period. “Many big businesses have decided Britain leaving the EU is going to take a long time and no one is rushing to make a significant decision about a relocation and get it wrong so we think the impact of Brexit is going to be markedly less and markedly later than perhaps people first thought. “Non-domestic investors, more active than ever, are attracted to London by comparative risk compared to their own markets, and also by comparative returns as prime yields on London offices are higher than those in much of Europe and Asia-Pacific.” More than 26 nationalities of investor have made trades transacting in London in 2017. Savills figures show Hong Kong buyers have accounted for the most activity (31.5%). UK buyers have accounted for 19.5% of all central London transactions. German investors have make up 13.3%, US investors 10.2%, mainland China 5%, Switzerland 3.1% and Middle East 2.1%. To send feedback, e-mail david.hatcher@egi.co.uk or tweet @hatcherdavid or @estatesgazette