Sales still scarce in West End – Savills
“Investors and agents alike are hoping new sales will spring in March after a very muted start to 2011,” says Savills in its latest research on investment in property in London’s West End. It notes that there were only 12 new opportunities marketed during January and February this year, which is well below levels seen during 2010 and 2009. Six deals were recorded in February.
“The reluctance to market is likely a function of the simple ‘Why sell now?’ belief, with rental values expected to be about to turn,” Savills notes. However, it notes that while there may be a shortage of sales of commercial property in the area during 2011, capital value volume is likely to be enhanced as more large lots come onto the market. It expects at least five sales of £100m-plus in March alone.
Savills says all owners of commercial property in the West End should be alert to the viability of residential conversion. There was another sale of a vacant office building to residential use in February, at Mellier House in Albemarle Street. Despite the revival in rents for available office space in the area and near-4% yields, residential values are repeatedly topping commercial prices – even outside the core areas of Mayfair, Chelsea and Knightsbridge, it says. “This will of course do nothing to alleviate the shortage of high-quality West End offices,” Savills notes.
