Investing in the commercial real estate sector in London has seen an extraordinary boom and is on track to break the record this year as international investors have flooded London.
As 2017 comes to an end property experts predict that the total volume of commercial real estate transactions in Central London could hit a new record high compared to the £21.6bn in 2014.
2017 was an exceptionally good year for property investment since during the first three quarters of the year the transactions reached £14.2bn, where investment came from more than 27 different countries. This results in UK-based property experts predicting that property investment could top up the £20bn threshold by the end of the year.
Robbie Duncan, director of research at Numis Securities, says: “The transaction volume in the commercial property sector recorded this year is fantastic and it goes to show that London has not closed for business after last year’s EU referendum. However, it’s important to note that sales of two big buildings [the Cheesegrater and the Walkie Talkie] make up a huge chunk of that investment.” According to Duncan, the Japanese investors will come back for “more” as their looking to further explore their options in London.
"Cheaper money, the rule of law, cultural familiarity and a need to diversify out of a home market is what's driving Hong Kong demand in the UK," said James Beckham, head of investment at property consultant Cushman & Wakefield, which advised the Walkie Talkie's buyers and Cheesegrater's sellers.
Based on CBR findings, capital from China and Hong Kong accounts for a third of all investment in London commercial real estate this year.
Far Eastern buyers could be soon competing for the London’s lion share as Abu Dhabi investors are heavily backing up the Broadway redevelopment in the old Scotland Yard Building. The Broadway, as it is called, will be a development of six lush towers named after the famous Sancy, Paragon and Cullinan diamonds, and will feature shimmering facades. Although a residential property investment, the Broadway could be one of the most significant property investments in Central London for this decade since it will offer exceptional views of the Houses of Parliament, Westminster Abbey, Big Ben, Buckingham Palace, the London Eye, Horse Guards Parade, St James’s Park and Green Park.
London has been attracting huge international property investment deals since the transparency of the legal system, the cultural hub within, the outstanding education and the cosmopolitan air could only maximize the capital gains of the investors.
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