Central London office investment volumes will exceed £18,5 bln in 2015,says JLL

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According to the JLL, Central London office investment volumes will exceed £18.5billion in 2015, with the City and West End sub-markets on track to achieve highest volumes ever recorded, at £11.3billion and £6.5billion respectively.

Docklands sub-market volumes are expected to fall from last year’s total of £2.8billion to £700million, though last year’s volumes were significantly boosted by the sale of the HSBC tower, for £1.1billion.

Overseas sources of capital have been prominent again this year, with Taiwanese investors particularly dominant. Historically, Taiwanese investors have lacked a strong presence in the London office market, but after debuting with three deals totalling £644 million in 2014, the total has risen to £934 million across a further three deals, with the likelihood of more to come in 2016.

Prime yields stand at 3.5% for smaller lot sizes in the West End and 4.0% in the City, both down 25 basis points over the year. In conjunction with rental growth, this has driven capital value growth in 2015, with prime City values up by 19% and prime West End values up by 12%.

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