London enjoyed a significant rise in the total take-up of space in its office sector during the second quarter of 2012. Research by BNP Paribas Real Estate revealed property investment in the West End surged by 30 per cent in the third quarter (Q3) to GBP950 million, compared with GBP730 million in the second quarter. However, other areas did not do so well, with no investments in the Docklands area and falls of 15 per cent in Midtown and 42 per cent in the City.
Commenting on the situation, managing director of central London at BNP Paribas Real Estate Dan Bayley said: "Whilst Q3 take-up was not spectacular, there are some major deals under offer which should deliver a strong last quarter across Central London." Paul Henwood of the bank's real estate investment team went on to state: "The West End investment market benefited from increased stock levels compared to previous quarters, as well improved interest from overseas investors. Conversely, Midtown investment transactions were very limited, as the market is seen as growth stock."
He also noted that the City was held back by a reduction in the number of new stock offerings over the summer and the impact of the nearby Olympics, adding that an "influx" of new investment transactions starting last month should lead to the figures improving in the final quarter of this year.
According to BNP Paribas, the prime rent figure for London markets now stands at GBP100 per sq ft in the West End, GBP54.50 in the City, GBP52.50 in Midtown and GBP37.50 in the Docklands area, with the availability of space only up 2.2 per cent in the second quarter from the same period in 2011.
High net-worth individuals are increasingly likely to be among those seeking to invest in prime property in London, according to a recent report by Cluttons. It produced a survey showing 57 per cent of wealthy individuals from outside the UK plan to buy property in the UK capital in the next year.