Investment in West End office property soared to £5.1 billion in the half year to June 2013 new research reveals. The figure represents a huge 68 per cent year-on-year increase on the same period in 2012 and confirms that confidence in the sector remains high.
The data comes from the second West End Office Investment Report, produced by IPD and London property consultancy H2SO, which analyses the performance of over £10 billion worth of assets.
It also shows that overseas investors continue to dominate the market, accounting for 67 per cent of total investment. However there was also a rise in domestic investment which registered a 51 per cent like-for-like increase. Despite this, the totals reveal a net UK disinvestment from the market of £1.2 billion.
The overseas capital flowing into the West End comes from a diverse range of sources. Italian investors have been very active in the market, accounting for close to a third of European buyers. Malaysian and Azerbaijani investors led the way among Asian investors accounting for 23 per cent and 17 per cent respectively of the £1 billion coming from the region. Overall, over 20 nationalities were among the buyers.
Rob Hayes, an investment partner at H2SO, said; “There is now an even greater diversity of overseas players active in the West End market, with increasing activity by investors from Continental Europe and the Far East.
“UK investors very much remain the most active sellers. However we are now seeing an increasing number of overseas investors selling the assets they bought two to three years ago and taking the profits.
“With this recycling of stock and strong continued investor interest in the West End, the outlook for 2013 onwards appears positive. There is already more than £1.4 billion of contractually committed transactions in hand.”
The news comes a day after Westminster City Council leader, Philippa Roe, flew the flag for the West End in an article in the Evening Standard. She highlighted that there are three times as many businesses in the district than there are in the City, and that it produces £34 billion in gross value each year compared with the £31 billion produced by the Square Mile.
Despite this, she argues, the West End has never enjoyed the level of political support given to the City of London, a situation she hopes will change now that the district has the West End Partnership to make its voice heard.
She calls for the West End to be granted special property tax arrangements which will allow the local authority to retain a portion of the £1.2 billion in business rates raised each year in order to invest in the area. The West End is not in competition with the City, she says. It is a ‘symbiotic relationship’ which benefits both parties and the capital as a whole.
Previous Post
Tesco pushed out of Suffolk Town by Campaigners
