Whilst quarterly investment volumes in Q1 2020, which totalled £2.6bn, fell to £595m during Q2, there has since been a surge in activity in London’s commercial office market.
Totalling £3.2bn, the capital has topped the list of global cities attracting the most investment into offices in the first half of 2020.
Nick Braybrook, Knight Frank head of London capital markets, commented: “As we expected, the easing of the UK’s travel and lockdown restrictions has been helpful in boosting activity. Despite this, a number of Asian countries still have quarantine measures in place for returning visitors from the UK, which we feel is holding back the market as there remains pent-up demand from many regions in Asia. We’ve already seen evidence of this in the form of The Cabot sale in Canary Wharf for £380m – the largest deal of 2020 – which went to a Hong Kong REIT, Link.
“As more substantial deals are traded in London, this is likely to boost confidence amongst international investors as well as vendors. In fact, we are already seeing available investments on the market increase in response to rising demand. Excluding under offers, we’re now tracking £4.6bn of available commercial real estate opportunities, which is up 27% year-on-year. This bodes well for overall activity from September onwards.”