London Office Market proving Brexit-proof
Two years ago, Britain voted to leave the European Union. London’s future position as a global investment hotspot became shrouded in apocalyptic rhetoric as fear-mongers predicted a mass-exodus to mainland Europe. Two years later, the sentiment is, if not optimistic, then certainly confident. It is clear that London continues to retain its status as a safe haven for overseas capital investment. The prime central London Residential market may have stalled – some argue that this was a market correction that was arguably overdue regardless of Brexit – but the office market remains strong.
A recent report by CBRE revealed that overseas buyers were behind more than 83% of all Central London office transactions over the last year to Q1 2018, the highest percentage ever recorded. The majority of this investment is reported as coming from Asia, a statistic which we can support from our own experience as private equity real estate advisors operating in this market. Currently, we are seeing Asian investors coming from China, Korea, and Singapore.
The record-breaking sale of The Leadenhall Building to a Chinese buyer last year – the highest price ever paid for a single UK building – eradicated any doubt that London’s office market is holding its value post-Brexit and a number of other high-profile deals have followed. Although the sale price is as yet unknown, last month’s purchase of Royal Mint Court by the People’s Republic of China represents another landmark sale proving the consistency the market’s strength. 22 Bishopsgate, set to be the City’s tallest tower and bar-raising in terms of specification and on-site facilities, signed its first tenants last month, with the office relocation planned for Q3 2020.
With the city and its adjacent districts performing well to date, we expect emerging commercial districts defined by new transport networks to prove increasingly popular with overseas investors. We are keeping a close watch on both Paddington and Farringdon, two areas set to gain from positioning on the Crossrail line and £775 million proposed development from The Sellar Property Group.
Any investors interested in finding out more about our thoughts on London’s office market can contact us on firstname.lastname@example.org or +44 20 3167 3380.