London’s West End sales market is being dominated by activity by UK private property companies and REITs, says Savills, with such sellers responsible for over 45% of turnover in the market to the end of April.
The international real estate advisor says that sales by UK private property companies and REITs were responsible for £1.17 billion of the £2.49 billion transacted in the first four months of the year in the West End. It is too early to tell whether these categories of sellers will exceed the full-year record of £2.28 billion of sales set in 2015, says Savills, but levels for 2017 have already reached 96% of the 10-year average annual turnover.
April saw transaction volumes of £578 million across 11 transactions, including the sale of the Grosvenor Victoria Casino by Aprirose, advised by Savills, for £70 million reflecting a net initial yield of 4.29%, and WELPUT’s sale of 3 St James Square to Joint Treasure for £135 million, reflecting 3.96% net initial yield.
Paul Cockburn, Head of the West End investment team at Savills, comments: “While it’s still early days, no one will be surprised if 2017 sets a new record for sales by UK property companies and REITs. The fall in the value of the pound and a subsequent influx of overseas investors has seen demand remain high for good quality assets. Savills was involved in over 25% of transactions by volume across the first four months of the year, and with over £450 million of live sales the lead into summer will be a particularly busy time for the market.”
Savills says prime yields in London’s West End market remain at 3.25% for the fifth successive month.