Investors invested record amounts of money into skyscrapers in London during the first six months of the year. 68 percent of the City office purchases came from Asia.
Savills, a real estate firm, looks at offices in the City that have more than 20 floors. According to the firm, buyers from Asia poured £3.1bn during the first half of the year, a rise of more than £300m as compared to the first six months of the previous year.
The said research came after the sale of Ropemaker Place that was finalised today to a company that is listed in Singapore for £650m and last week’s acquisition of the London headquarters of UBS for £1bn by a property tycoon from Hong Kong.
These most recent skyscraper deals come amidst both the “Cheesegrater” and “Walkie-Talkie” buildings being sold to investors from China last year.
The head of central London investment at Savills, Stephen Down, stated: “Investment volumes in the City of London reflect the ongoing level of investor demand, particularly in this case, from Asian origin.
He added:“It’s further positive news for London but arguably not a surprise, despite headlines to suggest the market is turning.
“London’s property market is made up of sophisticated investors who know what value is.”
According to figures from CBRE, a property services company investors from Asia also poured records amount of money into office deals in London in 2017. The transactions had a total amount of £8.6bn, or 35.6 percent of the total investment market in central London.
Real estate analysts imply that the increase in interest from foreign buyers has all but cancelled out the negative effects that resulted from Brexit.
The European real estate analyst at UBS Asset Management, Zachary Gauge, stated: “The continued appetite for foreign buyers after the EU referendum result took everyone by surprise.”
He added: “What I think we learnt was that for investors seeking long term income in a core market they are prepared to accept the risk of short-term volatility which is negated by the length of the lease and covenant strength.
“So over the long-term I don’t see Brexit having a major impact on the relative attractiveness of London to foreign buyers”