Investors make £13 billion bet that WFH won’t be the end of London offices

·2-min read
London office sales in 2021 could total more than £13bn  (PA)
London office sales in 2021 could total more than £13bn (PA)

Property investors eyeing London offices had a lot to think about this year: the rise of working at home, growing calls for environmentally-friendly space, and long lags in closing times in some cases.

Despite all the market uncertainty, there were plenty of buyers. Stephen Down, head of central London investment at Savills, said: “2021 investment volumes in central London had their ups and downs, but as the year went on we saw an increasing number of investors return to the market as they recognised the underlying strengths of the capital’s offices.

“The vast majority are looking at the long-term picture, and whilst there are short-term upheavals in office occupancy levels, most buyers recognise that best-in-class buildings will continue to perform strongly and remain confident in London’s future overall.”

A number of buyers are betting on demand holding up for modern office space with good transport links, even if workers are only there for part of the week.

Savills anticipates office investment turnover this year will be around £13.1 billion – similar to the pre-pandemic levels of 2019.

The firm has compiled a list of the largest deals in 2021 (as at the 12 months to December 14 and covering purchases with price tags on them):

February: A consortium led by Wing Tai Properties agrees circa £255 million deal for 66 Shoe Lane.

June: Brookfield buys 30 Fenchurch Street for around £635 million.

June: Ara/Suntec inks the £353 million purchase of 3 Minster Court.

July: Deka pays around £223 million for 8 St James’s Square.

August: Al Khashlok Group reportedly pays £227 million for 50 New Bond Street.

August: Derwent snaps up Euston Road site for around £190 million.

September: Hines secures mixed use development site at 18 Blackfriars Road for a rumoured £200 million.

September: 160 Old Street sold to a fund advised by J.P. Morgan Global Alternatives for £181.5 million.

October: Omincom swoops for 2&3 Bankside. Rumoured price of £440 million.

October: Nuveen acquires offices at Sutton Yard, Goswell Road, for close to £190 million.

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