Smaller deals dominate slowing West End investment

Smaller investments dominated a slow summer for real estate dealmakers in London’s West End. Savills tracked £248m of deals during August, half of the £482m recorded a year ago and less than a third of the £821m from August 2021 – although far above the all-time August low of £59m in 2020. Ten of the 12 deals sealed in August were for less than £20m. The average lot size in the market so far this year is £36m, compared with £58m a year ago. Year-to-date investment has reached £2.1bn across 59 deals. All West End deals in August fell into the core-plus or “opportunistic” category, with only a fifth of core trades so far this year. “Core assets have typically seen the least movement in price, and this low number of core trades is perhaps reflective of the narrowed pool of investors willing to pay tighter yields for these opportunities,” analysts at Savills said. The largest trade in August was GPE’s purchase of the freehold interest in Soho Square Estate, 29-43 Oxford Street and 16-19 Soho Square, both W1, for £70m – half the price tag previously negotiated. The 55,813 sq ft office and retail block is set to be vacant in March 2024 and comes with consent for a 66,000 sq ft office and 30,000 sq ft of retail space. There is now more than £4bn of assets being marketed, Savills said, the highest level at any point this year. Significant assets coming to market include Conde Nast’s Vogue House, 1 Hanover Square, W1. The building, which comes with refurbishment and extension opportunities, can be extended from 62,777 sq ft to 88,074 sq ft. To send feedback, e-mail chante.bohitige@eg.co.uk or tweet @bohitige or @EGPropertyNews Image © New West End Company See which agents are doing the most deals in the West End >>