London commercial property sector set to see record investment despite brexit
The commercial property sector in London is all set to achieve record investment in 2017
Latest figures show that the uncertainty surrounding brexit negotiations is not having impact on the London’s commercial property sector. On the contrary, the commercial property sector is rapidly growing and is all set to touch record high as the year 2017 ends. Dispelling fears of a downturn in the sector after last year’s EU referendum, the commercial property sector in London is growing at a fast rate as proved by an overwhelming interest shown by foreign investors.
However, some in the property sector are urging the government to work in collaboration with it to ensure business and investor confidence. Figures by property advisor Savills show huge investment in the sector in the city which is all set to outperform the earlier record year of 2014 which saw figures of £21.6bn. It predicts the total volume of commercial real estate transactions in central London during 2017 to be £20bn. Commercial property transactions in central London in the first three quarters of this year has hit £14.2bn and the average final quarter turnover in the last five years is £6.6bn.
Investment in the Square Mile for the first three quarters of this year has already beaten the full-year total for 2016. Volumes hit £8.5bn by the end of September – six per cent higher than 2016’s annual total of £8.07bn. Robbie Duncan, director of research at Numis Securities, says that the high volume of commercial property transactions show that the sector has not slowed down since the UK’s separation from the EU and London continues to draw the attention of international investors on a large scale. It proves that London has not closed to business since the referendum.
However, the chunk can be credited to the sale of two prime properties in London. These big buildings – the Cheesegrater and the Walkie Talkie – raised the bar hugely. He also predicted Japanese property investment in the city next year. Although, British Property Federation boss Melanie Leech is somewhat pessimistic and warned over a lack of clarity over brexit transition. She demanded more clarity so that high level of investor confidence in the sector is maintained and wanted a smooth transition to the post-brexit scenario.