Overall Investment into Central London offices totalled £5.3 billion in Q2 2018, taking the aggregate transacted for the year-to-date across Central London to £7.7 billion, according to the latest figures from JLL.
According to JLL’s findings the strong figures for the second quarter of 2018 represent a 121 per cent increase on the more muted first quarter of 2018 and a 28 per cent jump on Q2 2017. Whilst the total for the first half of 2018 is 11 per cent down on the corresponding period for 2017 (£8.7 billion) it has surpassed the 10-year average (£6.1 billion) by 22 per cent.
Julian Sandbach, Head of Central London Capital Markets at JLL said: “Whilst 2018 got off to a slower start, the second quarter has seen volumes rebound strongly. Q2 has witnessed a number of significant deals including British Land/GIC’s sale of 5 Broadgate to CK Asset Holdings for £1 billion and the sale of Ropemaker Place by a consortium managed by AXA Real Assets to Ho Bee Land for £650 million. Transactions of this nature demonstrate the continued appeal of London, especially for Asian investors who continue to seek out best in class opportunities in the capital.”
The City of London was the main destination for inbound capital in Q2 2018, with £3.6 billion of assets traded, a 60 per cent increase on Q2 2017. The West End saw less activity with transactional volumes of £1.1 billion, representing a decline of 45 per cent on the same period last year. East London saw a significant increase in activity with four major deals totalling £658 million, more than half of 2017’s total volumes (£1.1 billion).
JLL’s research cited that 78 per cent of purchases in the second quarter of 2018 were made by overseas investors continuing the dominance of inbound capital into the UK and London. Domestic buyers were more visible in the West End and were involved in nine of the 19 deals that were completed, accounting for 38 per cent of volumes.
Sandbach added: “Looking to the second half of the year, the sustained demand, particularly from foreign capital for Central London assets will ensure a healthy level of transactions. However, the concerns surrounding the political turbulence around the Brexit negotiations has the potential to affect the volume levels of 2018.”