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The city of London was regarded as a “safe haven for investment” over the past year, according to new figures that show almost ten billion UK pounds was spent in the making of commercial property deals connected with the city in 2010.
The figures were released by property agent firm Cushman & Wakefield, and see a rise in over three million from the commercial property investment totals of the year before, with only just over six and a half billion UK pounds’ worth of deals having been made in 2009. “2010 went out with a bang with the total amount of completed transactions in the city standing at around four point seven billion pounds, in line with the out turn for 2009, if Blackstone’s acquisition of Broadgate is included for that year,” says Bill Tyser, the head of City investment at Cushman & Wakefield. “However, the number of deals increased dramatically, with eighty six transactions for 2010 against sixty in 2009. With the squeeze on supply of good quality investment stock, the outlook remains strong for further international activity during 2011 and we expect to see further improvements in prime headline retail growth.”
“Demand remains strong from both domestic and overseas investors as London continues to be perceived as a relatively safe haven for investment,” says Clive Bull, the head of investment in Central London at Cushman & Wakefield, in an interview with The Telegraph. “The annual total is well up on that of 2009, though nowhere close to the volume average of sixteen billion of the buoyant market during 2005 to 2007.” That said, Bull agrees with Tyser that the growing rate of investment in commercial property in the city of London is a major source of encouragement, and notes that Cushman & Wakefield anticipate that the current upward trend will only continue to grow in 2011. “With sterling still weak and an increase in stock likely with banks off-loading assets, we are confident that 2011 will see volumes continue to rise,” he adds.
One of the biggest deals made in the course of last year was the acquisition of the Lehman Brothers’ former office tower in Canary Wharf, which was bought by JP Morgan for an astonishing four hundred and ninety five million UK pounds. Other non insignificant commercial property deals include Carlyle’s successful sale of the former London office space portfolio of Simon Halabi for six hundred and seventy one million UK pounds, and the Crown Estate selling off a twenty five percent share in its Regent Street portfolio.
In addition to the growth in commercial property investment deals, there is more good news, with the take up of conventional office space in London also on the increase, according to figures from BNP Paribas Real Estate. BNP’s research suggests that the number of new firms signing up to rent new office space in London over the course of last year increased by forty three percent on the year before, while officebroker.com figures show that twenty one percent more companies chose to acquire serviced executive office space in London since the beginning of 2010.
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