West End Investment Market Upturn

The West End investment market is showing some signs of recovery with over £1bn of deals under offer, whilst availability has reached its highest volume so far this year to date at over £4bn according to research from Savills.

The £4.1bn of available stock is across 87 opportunities, with around 50% of this volume coming from the 10 largest sales, and suggests there is a growing willingness to “market test assets” the firm said.

Savills is tracking over £1bn under offer, of which 42% by volume represents deals agreed within the last two months, and, despite the summer lull in trade, is tracking eight bid processes in July.

Stephen Down, Savills’ executive director and chairman of central London and international investment, said: “Although we’ve seen a decline in activity this year against the current economic backdrop, it’s encouraging to see large trades taking place and a healthy pipeline of activity for the remainder of the year, showing signs of the West End market picking back up.

“So far, the buyer audience has included investors from across the globe including unlevered, cash-rich family offices, plus funds from the US and Europe, all seeking core product and where predominantly the ’sweet spot’ for purchases is between £50m and £100m.”

The largest active bid processes include 125 Shaftesbury Avenue and 60 Great Portland Street, which Savills said both provide a “strong bellwether of market sentiment for value-add and core-plus opportunities of scale, respectively”.

The largest completed trade was Liberty House, 76 and 80 Hammersmith Road, which MRP, the property development and investment arm of McAleer & Rushe, acquired for £48m.

Other significant West End deals include Labtech’s disposal of the freehold interest in 1-11 Hawley Crescent, Camden, serving as Dr Marten’s European headquarters at a passing rent of £46.90/sq ft to a European property company