Wednesday, February 21, 2024
International

More Asia-Pacific buyers buy London commercial properties

London properties

CBRE and Savills said that buyers from the Asia-Pacific dominated foreign property investment in the British capital in 2023, with many looking out for bargains in the city’s depressed commercial property sector

Buyers from Singapore and other countries in the Asia-Pacific have been busy snapping up dozens of commercial properties in London over the past year, according to data from two real estate firms.

CBRE and Savills said that buyers from the Asia-Pacific dominated foreign property investment in the British capital in 2023, with many looking out for bargains in the city’s depressed commercial property sector.

Ruth Hollies, the head of European forecasting at CBRE, said that Singapore buyers have formed the biggest group among Asia-Pacific investors for the last five years. In 2023, they accounted for acquisitions worth a total of £1.1 billion, with Japanese investors second on the list with £900 million.

Savills noted that one significant buyer last year was Singapore’s sovereign wealth fund GIC, which acquired a 75% stake in Tribeca King’s Cross – an 830,000 square foot life-sciences development. This investment reflected a land value of £300 million, said Savills.

Tribeca – which comprises workspaces, homes, shops and a hotel – will also be the new headquarters for British high-street clothing retail firm Ted Baker. The entire site is due to be completed in 2025.

There is growing interest among overseas investors in the central areas of London and the financial district, with many properties up for sale at a time of soaring interest rates and the fallout from the pandemic, which led to many employees working from home and reducing their time spent at the office.

CBRE data found that total investment in the City of London plunged to £3.6 billion in 2023, a shadow of the £12 billion annual levels prior to the pandemic.

In central London, local and foreign investment in offices declined from a high of £15 billion in 2021 to £5.2 billion in 2023 – the lowest level since 1999.

Jamie McCombe, a partner at UK commercial property agent Cluttons, estimated that property capital values had dropped by an average of 18% in the 12 months ended September 2023. Shopping centres were down by 10%, while offices in outer London declined by 27%, he said.

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