Cushman & Wakefield, the largest private real estate service company in the world, reported sales of £3.38 billion in central London in the second quarter of 2014, bringing total investment to £7.6 billion in the first half of 2014. appart hotel
The total for Q2 2014 is down from £4.28 billion in the previous quarter, which was the largest amount ever reported in central London - however the purchase of More London by St Martins for £1,7 billion was greatly overstated.
In the second quarter of 2014, foreign capital again dominated the bulk of deals, at 75% of total value.
C&W report highlights Include the following:
In the second quarter of 2014, 3.38 billion pounds (US$ 5.7 billion) were invested in commercial immobilization in central London.
West End valuation reached £929 million in the second quarter of 2014.
City & Docklands transactions amounted to £2.45 billion in the second quarter of 2014.
Over 20 percent of City & Docklands deals were accounted for by Chinese investors in the first half of 2014.
In the first half of this year, Chinese investors completed more than one fifth of their investment in commercial property in the City & Docklands.
City & Docklands
In Q2 2014, the City & Docklands' gross investment volume totaled £2.45 billion, including 27 large transactions. From this money, four investment deals totalling more than £200 million were concluded.
Overseas investors are still primarily involved with transactional investments, from 76 per cent in the first quarter to 78 per cent in the second quarter of 2014. Although United Kingdom buyers accounted for 16 of the transactions in Q2 2014, they only accounted for 22 per cent of overall sales value, and the remaining 11 international investors purchases had far bigger average transaction sizes. For UK purchasers, the average transaction size was £32.9 million; for overseas purchasers, the average was £174.5 million.
Chinese capital accounted for 45% of city and dockland agreements in the 2nd quarter of 2014, which is much greater than the 3% of Chinese investment in the first quarter of this year.
The Canary Wharf Group sold 10 Upper Bank Street, E14, 70% of Chinese Life's holdings, 20% of Qatar's holdings and 10% of Canary Wharf's share ownership for £795 million.
With about 20 transactions now being offered or exchanged, it is anticipated that the third quarter of 2014 will continue to generate a strong turnover of £1 billion.
The top five agreements in the city & docklands for the second quarter of 2014 amounted to £1.72 billion, or 70% of total investment.
WPC Updates | WPC Updates Top 5 of London's largest deal by price in Q2 2014 "This year, slightly under 6 billion pounds of property transactions were completed by the end of the second quarter of 2014," Bill Tyser from Cushman & Wakefield's City investment team said, "with roughly 500 million pounds more now available transactions." The demand for foreign investors to join the commercial property market in London is still growing, with Chinese investors accounting for more than one fifth of all City & Docklands deals so far this year. As already indicated, the bigger the international financial and geopolitical risk, the greater the impulse to invest in London markets, and there is no evidence that this trend is going to slow at the moment. HSBC Tower's current sale of £1.1 billion is the most expensive property on the market, at 3 billion pounds. In the second half of the year, for instance, the Gherkin, 30 St Mary Ax, is expected to offer a range of important investments. Overall, 2014 seems to be another year of high volume turnover, if not a record year."."
The West End is a London district.
In the second quarter of 2014, London's West End investment volume amounted to 929 million pounds, averaging 40.4 million pounds. While this quarter's turnover is smaller than in the previous quarter and Q2 2013, it's owing not to lack of demand but to a stock scarcity. In addition, over £1 billion of stocks have been released on the market over the last two months, and in the second half of 2014, we predict increasing investor interest.
Outstanding transactions in this quarter include: the £112 million acquisition of Bond Street House, 15-16 New Bond Street, the purchase of the Holborn Links Estate by Triangle, $212.5 million and the purchase of the £33.7 million by Scottish Widows of 110 Park Street, showing a net initial return of 3.25%.
WPC News | The West End of London - Top 5 Deals By Price - Q2 2014.
The purchase amount was 69 percent for Middle Eastern, Continental Europe, Far Eastern and North American customers in Q2 2014, with Middle East, Continental Europe, Far East and North America buyers.
"The restricted stock availability resulted in a minor slowdown in turnover for Q2, 2014, but we expect to see robust turnover activity in the second half of 2014," stated Mike Tremayne from the West End investment team of Cushman & Wakefield. The West End investment market's demand and capital weight are as high as ever, and with the optimistic rental growth narrative now becoming a reality, we see no signs of this dynamic market waning.