Bumper month for City investment – Savills
Buyers of commercial property for sale in the City of London in recent months have generally been focused on value-added investments, says Savills. The firm has noted a sharp increase in turnover during May, with total completions of £1.36bn in City property during the month across just six deals. This is the highest monthly turnover so far this year and compares with just £304m in April.
The supply of City property has remained restricted, with a slight increase in the number of £10m-£25m properties on the market, Savills says. This summer could be quieter than usual given the approach of the Olympics, the firm notes, so sellers are currently keen to close deals by the end of this month.
It notes recent instructions on a number of properties requiring asset management or refurbishment, including 207 Old Street, Marlborough Court, High Holborn, 5 Cheapside and 20 Little Britain, and says there have been more than 50 inspections on average for each of these properties, resulting in best bids called for in each case. For investments offering longer income with less asset management, interest has been more limited, with investors adopting a cautious approach “and the UK REITS frustrated by the lack of suitable opportunities”, Savills adds.
Key deals in May include the completion of Plantation Place in EC3 to Moise Safra for £470m, Devonshire Square in EC2 to Blackstone for £340m, Drapers Gardens, also in EC2, to RREEF on behalf of Ginko Tree for £286m and Thames Court in EC4 to POBA for £163.7m. Also during May was the Savills sale of 5 Cheapside in EC2 to Amsprop for £20.75m, representing a capital value of £578 per sq ft for a vacant building, and 21 Tudor Street to AFIAA for £73.45m. Savills notes that there is an additional £1bn or so of property under offer in the City, with 50% of this accounted for by two deals at Broadgate West and Peterborough Court.
