According to Knight Frank’s London Report, London retained its title as the world’s top destination for investment in commercial real estate in 2018.
London remains by far the biggest global destination for investment in real estate, despite ongoing uncertainty around Brexit, with £16.2bn ($21bn) invested in the UK capital’s commercial offices in 2018. This compares to £14.3bn ($18.5bn) invested in Manhattan, £12.1bn ($15.6bn) in Paris and £8.4bn ($10.8bn) in Hong Kong. While total investment volumes for Central London were down slightly on 2017 (£16.8bn, or $21.7bn) the average deal size rose to an all-time high of £81.5m ($105m) in 2018.
Global Commercial Investment Highlights of 2018 Include:
- Central London commercial offices attracted £16.2bn ($21bn) of investment in 2018, more than Manhattan, Paris and Hong Kong
- Greater China remains the largest investor in London real estate
- £40bn ($51.8bn) of global capital actively looking to invest
Greater China remains the largest source of investment in Central London real estate, despite new capital restrictions imposed this year, accounting for £3.48bn ($4.5bn) in 2018 and 21% of all investment in Central London offices last year. Although Greater China remains London’s biggest source of capital, the total volume of investment from the region was down 51% on 2017, when Central London saw a record £7.12bn ($9.2bn) invested into commercial offices from Chinese investors.
2018 saw South Korea significantly increase its investment in Central London, with £2.56bn ($3.3bn) invested in the capital, an eight-fold increase on the £300m ($388m) invested in 2017. Capital from the Far East as a whole accounted for 47% (£7.67bn, $9.9bn) of all investment in Central London offices in 2018.
Nick Braybrook, Head of Central London Capital Markets, Knight Frank reports, “Although 2019 presents ongoing challenges, international investors remain undeterred. Our Global Capital Tracker identifies £40 billion ($51.8bn) still targeting London this year, with some seeing the political turbulence and currency weakness as an opportunity, combined with the strong occupational market fundamentals.