Canary Wharf and the city are seen at sunset in London, December 14, 2016.Reuters / Eddie Keogh
- Overseas investors continued to pour money into London’s pricey offices last year, driven by Asian investors who snapped up landmark buildings including the “Walkie Talkie” skyscraper.
- Over half of overseas investment in 2017 came from Asia.
- £5.85 billion of overseas investment in 2017 was from Hong Kong.
LONDON — Overseas investors continued to pour money into London’s pricey offices last year, driven by Asian investors who snapped up landmark buildings including the “Walkie Talkie” skyscraper.
Real estate firm CBRE said investors spent £16.4 billion on office buildings in the capital in 2017, 26% more than the previous year. About 81% of those deals were completed by overseas purchasers, and £6.9 billion, or 54%, of investment was from Asia.
Of that, a record £5.85 billion of overseas investment was from Hong Kong, higher than the total HK investment in London for the last three decades combined.
Some of those Hong Kong transactions were big-ticket buys, including the record £1.3 billion ($1.7 billion) purchase of 20 Fenchurch Street — known as the Walkie Talkie — and of the £1.14 billion 122 Leadenhall Street, nicknamed the Cheesegrater.
Much activity in the commercial London market from Hong Kong comes from several well-known investors who already hold high-value assets in the capital. Many of them are looking to increase their exposure, attracted by long-term leases, a discounted pound, and London’s “safe haven” status.
Read more: What’s driving Chinese investment in London real estate?
“London has been a focal point for global investors since recovering from the [2008] financial crisis, with interest reaching a new high peaking in 2017,” said Chris Brett, head of international capital markets at CBRE.
“This was largely driven by the landmark sales of 20 Fenchurch Street and 122 Leadenhall Street, which both sold for more than £1 billion.”
He said that London looks near fully-priced, which is pushing investors to look outside of London for the best value.
“Increasingly over the course of the last 12 months we have seen this wave of investment into London pushing capital into more affordable, up-and-coming cities like Manchester and Birmingham, as some investors are unable to compete with the international money coming into London,” he said.
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