New entrants in the Central London property investment market

This year we are bound to see continued investment across the entire market. This will mainly be made up by overseas investors who make up the majority of purchases in Central London, but also the UK institutions are expected to be very active again. It is expected that the UK institutions will focus on lot sizes between £30 -£100 million and are tending to be encouraged by strong rental growth which is being predicted to continue over the next 5 years.  

Within the overseas market it is expected to see great interest and intent from Asia, particularly China. Last year was a strong year for both mainland Chinese investors as well as Hong Kong which is highlighted by purchasers of building such as the Lloyds Building and the half share in Hannover Square which Great Portland Estates sold to HKMA. China is going to be a very strong force in the next five years and with continued interest from the institutional market Eugene O’Sullivan predicts ‘the level of Chinese investment going one way and that is upwards’. 

Yields are likely to stay firm across Central London. This is a combination of both weight of money trying to get exposure to the Central London investment market, but also rental growth. We are therefore going to see a firm buoyant market and the general level of confidence in Central London is high. Last year of the £18 billion invested across Central London around 75% of this came from overseas, this is consistent with2012 and is a trend that is likely to continue. 

This news was brought to you by Morgan Pryce, a specialist tenant acquisition agent with offices in Oxford Circus and the City. Morgan Pryce specialises in search, negotiation and project management and works exclusively for tenants.