German investment funds have swooped to buy over £500m of properties in the Square Mile. In the worst market for commercial property for at least 15 years, German institutions have used the Euro's strength and a dearth of competition to place under offer a string of buildings.
They include 88 Wood Street, the glass-fronted office designed by Richard Rogers, which ING is set to sell to German fund SEB for £180m. SEB pounced after a deal on the building with a US buyer collapsed and got £10m knocked off the asking price. In addition, UBS Asset Management is selling Milton Gate to German fund Signa for £150m, while Hammerson is selling Moor House in the City to Deka for £230m.
The Germans are taking advantage of a shift that in 18 months has seen the yield on property move from 4.25 per cent to over 6 per cent. This reflects a huge fall in price, with rents largely holding up.