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China Investment Corporation
Cushman and Wakefield
London Property Performance
London has enjoyed a record year for property sales, bucking the European trend for falling house prices and market stagnation. According to new data from Cushman & Wakefield, the real estate advisory group, a surge in demand has caused real estate transactions in the capital to hit the highest level since the start of the financial crisis, the Financial Times reported. This has been driven by a surge in Asian demand and sales of offices, retail units and hotels have risen sharply to GBP 13.6 billion throughout 2012. This is a dramatic increase of 25 per cent on 2011 levels and illustrates the strength of London markets. For those considering property investments in the capital, competition is likely to be fierce on the back of such a performance and a surge in foreign activity. Three-quarters of all transactions made this year involved foreign buyers, the newspaper recounted. Bill Tyser, head of investment for Cushman & Wakefield in the City of London, explained that the property market in the capital is currently operating in a different economy to that of the UK, with many viewing the area as a haven of political and economic calm and security. This environment will “ensure this international interest will continue into the foreseeable future”, Mr Tyser added. With many foreign nations, particularly in Asia, also supporting the London commercial market, property in the city is a safe asset for investors. In 2012, 45 per cent of all deals involved buyers from Asia and government-backed funds from Malaysia have been behind many high-profile acquisitions, such as the GBP 400 million Battersea Power Station sale in September. According to the Financial times, Malaysian buyers are also thought to be among the bidders for Blackstone’s GBP 800 million office campus Chiswick Park. Such deals will no doubt prove instrumental in securing the future of London and its property market. Korean, Singapore and Indonesian sovereign wealth funds have also been active in the City, West End and Canary Warf, while the China Investment Corporation snapping up the UK headquarters of Deutsche Bank for GBP 245 million.
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