Commercial property investment in London's West End has hit a record high of £1.93bn in the first quarter of 2017, led by Hong Kong buyers.
The value is up by 22% on the five-year first quarter average, surpassing the West End's previous record of £1.8bn hit in 2013, according to Cushman & Wakefield (C&W).
A number of large deals swelled the figures, such as the sales of the Ampersand Building, Soho home of the Candy Crush game headquarters, the Facebook Campus on Rathbone Square and One Kingdom Street in Paddington. Ampersand sold to Hong Kong's Emperor Group for £260m, while CC Land acquired One Kingdom Street for £292m.
The City also saw a strong first quarter, with total transaction volumes increasing 9% on the year prior, amounting to £2.25 bn.
Across the whole of central London, the total volume invested reached £4.18bn – up from £3.7bn in the same period last year and approaching the 2015 level of £4.6bn. Buyers are currently being enticed by “the currency advantage enjoyed by non-sterling investors” combined with the West End's “wealth preservation characteristics”, according C&W's head of West End capital markets.
The interest comes in spite of Brexit-motivated concerns over the long-term leasing prospects for commercial property, with some worrying that businesses might relocate following the UK's departure from the EU.
Asian buyers accounted for 72% of acquisition volumes in the City, a large part of which was attributable to CC Land's purchase of the Leadenhall Building, more commonly known as the Cheesegrater. On the other hand, UK investors acquired £369.3m of City stock while disposing of £1.27bn, selling more than what they bought.
In the West End, Great Portland Estates was prepared for a property value decline, selling the Facebook Campus at around 4% discount to its latest valuation. The development was acquired in February by German investment group Deka and real estate investment trust WestInvest Gesellschaft for £435m.