Continental European Investors Covet London Market

The investment community across the pond is keen on United Kingdom’s number one hub, putting its money where its mouth is, Savills research shows.
View from Cannon Place in London
View from Cannon Place in London

The investment community in Mainland Europe is keen on London, and it’s putting its money where its mouth is, according to newly released research from global real estate services provider Savills. Year to date, investors on the Continent have doled out £1.7 billion, or approximately $2.2 billion, on commercial real estate in Central London, representing 31 percent of market activity.

“Investors continue to recognize London’s attractiveness as an international market place and a safe haven for capital,” Felix Rabeneck, director with Savills, said in a prepared statement. Among the larger displays of confidence was Germany-based Deka Immobilien’s acquisition of the fully occupied, 418,200-square-foot Cannon Place office property from Hines for £485 million—roughly $628 million—in mid-April.

Cannon Place in London
Cannon Place in London

The commitment of Continental European investors to London is twice as strong as it was during the same period in 2016, when they shelled out only £824 million—a little over $1 billion—in the market. So much for the anticipated Brexit-induced wariness. “In spite of headwinds generated by Britain’s decision to leave the EU last year, the U.K. continues to look stable to overseas investors and comparatively more attractive than many other markets,” Rabeneck added. “This, coupled with a fall in the value of Sterling, has led to a return in appetite from European investors.”

However, it’s not just Mainland Europe that’s laser-focused on London. The international investment community points to London as the most attractive city within EMEA, per a global investor intentions survey by commercial real estate services firm CBRE Group, citing its status as an established market with liquidity and transparency.

Images courtesy of Hines and Cannon Place