With £6.81bn of office assets having transacted by the end of November, and 44 buildings currently under offer, total 2021 City investment volumes will reach £8bn by the end of this year, according to real estate giant Savills.
This assumes that the sale of 5 Broadgate, the UBS headquarters, understood to be under offer to Korea’s NPS for a reported price of £1.25bn, does not exchange until the new year.
If the sale of 5 Broadgate proceeds as expected in Q1 2022, Savills said this will contribute to a potentially record first quarter for the City, overtaking the previous record of £3bn set 14 years ago, in 2007.
According to Savills, the cumulative total of £6.81bn reached by the end of November was almost double the volume reached by the same point in 2020, when only £3.4bn had been transacted.
North American investors
89 per cent of November’s monthly turnover took place off-market, said Savills, and the month was dominated by US investors, with both Blackstone and PGIM acquiring properties.
This means that North American investors retained their position as the leading buyer group in the City in 2021, accounting for 32 per cent of total 2021 turnover. UK and European investors were responsible for 25 per cent and 24 per cent of total volume, respectively.
“The City market is ending the year on a high, with volumes broadly on a par with 2019 and well ahead of 2020, showing investors’ clear confidence in the resilience of London,” commented Stephen Down, head of central London investment.
“Looking at the numbers, 2022 is set to get off to an equally strong start, dominated by the UBS London headquarters sale,” he continued.
“While US buyers have led the pack this year, we expect that the next 12 months will see a more diverse set of international buyers returning, particularly those from Asia Pac and the Middle East, assuming that travel restrictions are not imposed once again,” Down added.