Estate agents Savills has revealed that £2.3bn was invested in the London commercial property market in July 2017, bringing the total invested this year to £11.5bn.
This is a 24% increase on the figures from July 2016, and it is expected that the total invested by the end of 2017 will easily exceed last year’s total.
Savills said that Asian investors account for over 63% of the money invested in the London property market. China’s government has introduced restrictions that affect mainland Chinese investors, but Hong Kong investors are expected to remain extremely active. The highest value property deal in 2017 was for 20 Fenchurch Street, which was sold to a Hong Kong property group for £1.3bn.
Rental yields are still good, with an average of 4% in the city, and 3.25% in the West End of London. Stephen Down, head of Savills London investment team, said:
“We expect there to be more stock coming on to the market as we approach the end of the year as existing owners of investments take profits and, provided these sales are priced correctly, we should see continued strong turnover activity in the next three to four months.”
Although foreign investors are prominent in the London property market, 11% of investors are from the UK. Commercial mortgages are available at low interest rates and with rents at high levels and a healthy capital growth, , it is not surprising that investors continue to be attracted to the capital.
The information contained in this article is purely market commentary and does not constitute individual personal advice.