Figures from Savills shows turnover in the City of London in February reached £535.9 million across eight deals – the highest turnover for the month since February 2015 – while £345 million was transacted in the West End office market across seven deals.
Savills suggests this shows some Brexit resilience, but nationwide the UK market saw £5 billion in the first two months across all sectors.
The first few months of every year tend to be quiet, but Savills is confident that appetite for London real estate remains. Overall, since the beginning of the year volumes are down on the long-term average.
The City sees a total of £647.2 million, marking a 4% decline on 2018 figures, and 29% down on the long-term average (£918 million) for the first two months of the year. In the West End, total turnover for the first two months of the year reached £475 million, in line with 2018’s performance but down on the long-term average (£1.03 billion).
UK investors account for the largest share of investment in the City in 2019 (63%), while European buyers account for the lion’s share (62%) of activity in the West End, says Savills.
Stephen Down, head of Central London investment at Savills, said:
“Although the first quarter of any year tends to be quieter, there is undoubtedly a degree of caution in the market at the moment because of Brexit. However, there are a number of investors that see this as an opportunity.
“Those deals that are offered to the market still seem to draw in a healthy level of prospective buyers particularly in the development, opportunistic and core plus space. There has been an element of repricing in core assets recently, but marginally so, and where properties have struggled to sell it is more to do with over ambitious pricing expectations from the outset than a lack of interest from buyers. We continue to receive regular fresh enquiries through our overseas offices and assuming we have an acceptable solution to Brexit by the end of March then we expect investors to return with greater desire to transact in the second half of the year.”