Investment in West End offices has more than doubled in the first quarter of this year compared to the previous three months.
According to Knight Frank there was £1.15bn spent in the first quarter of 2008 compared to £555m in the last quarter of 2007.
Values stabilising
Anthony Barnard, a partner in the West End investment team at Knight Frank said: ‘Outward yield shift has slowed and values have stabilised following falls during Q3 and Q4 2007.’
The research says private property companies and private investors are the most active sectors in West End investment, and the market is also being bolstered by the entrance of German open and closed ended funds.
Cash is King
‘It’s because of availability of credit,’ said James Roberts, head of central London research. ‘The credit market has frozen up so anyone who has cash is finding it easier. Cash is king.’
In the leasing market, take up in the West End fell by 6% from 1.2m sq ft at the end of last year to 1.1m sq ft. Mayfair and St James’s performed well off the back of a number of hedge fund deals with take up increasing by 40%.
The research said there is £960m of stock on the market with £500m under offer.
The City has also experienced an increase in transactions with £970m spent in the first quarter of 2008 compared to £814m in the last quarter of 2007.
The City’s leasing market suffered further from the impact of the credit crunch on the financial markets with headline rents fell from £63.50/sq ft to £60/sq ft.
Take-up increased by 21% to 1.6m sq ft, which is lower than the ten year average for the period of 1.8m sq ft.
