Opinion

City and West End Targeted by Overseas Buyers

Overseas investors are continuing to flock to London and are specifically targeting the City and West End, according to Savills. The international real estate advisor revealed that in 2012 foreign buyers accounted for 76 per cent of overall transactions in the City and 67 per cent in the West End. This compares to 60 per cent recorded for both markets in 2011.

Transaction volumes in the city totalled £8.9 billion, while the West End enjoyed £6.1 billion worth of sales overall. Among overseas buyers, Asian investors dominated in the City, accounting for £2.27 billion of transactions. Savills stated that during the year they advised people from Malaysia, Japan, Greater China and Korea about purchasing in London, including the sale of Thames Court and 10 Queen Street Place.

Europeans were the biggest spenders in the West End and were involved in transactions totalling £1.55 billion. Italy, Spain, Germany and Sweden were the most active countries, with the sale of 1 Southampton Row in Covent Garden and King's Place in King's Cross the two sales of note.

However, it isn't just overseas buyers that have their sights set on the capital and investors from the UK also made their presence felt in 2012. Savills claim that Britons accounted for 24 per cent (£2.17 billion) of market share in the City and 33 per cent (£2,019 million) in the West End.

Stephen Down, head of Central London investment, commented: "Central London has continued to appeal to a wide range of investors, particularly from overseas who are generally attracted by the highly liquid market with larger, prime properties that are let on a longer lease, with a secure income and a lower yield. In contrast, domestic purchasers in Central London have been focussed on smaller lot sizes that are multi-let, which could include secondary properties, where they can implement a strategy to work the asset and then remarket."

British buyers are also exploring the US market and Stonehage Investment Partners told the Financial Times that residential and commercial properties are now in high demand. US residential property accounts for between eight to ten per cent of a typical client's portfolio.

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