Capital growth for commercial property in central London outpaced that of the entire UK in May, according to the results of a study released by CBRE. While total returns in the rest of the nation fell to 0.1 per cent nationwide, central London was an island of growth which posted a rise to 0.7 per cent. This figure represented an increase from the 0.5 per cent posted in April. Capital growth in the city also increased, moving from 0.1 per cent in April to 0.4 per cent in May.
Despite the fact that the UK commercial real estate market is currently slowing down, analysts are not predicting that this situation will continue over the long term. The UK is seen as a safe haven for commercial property investors compared to the more volatile European markets, and this trend is likely to continue.
The recent growth in central London commercial properties has been linked to the £2.5 billion which was invested into the market earlier this year. This figure represents a 25 per cent increase over the amount investors poured into that area during the previous 90 days. A large number of properties were purchased by foreign buyers, with over half of transactions falling into this category.
Rental units are expected to grow in the West End in the latter half of 2012. Victoria is predicted to be a hot spot for commercial real estate for investors, who will be drawn to a number of developments which will bring new commercial space into the area. Central London’s West End is performing exceedingly well, given the current economic conditions, which serves to prove that even in the most challenging of economic circumstances there are opportunities for those individuals who are bold enough and savvy enough to seek them out.