London’s commercial properties on the rise despite currency concerns
International investors accounted for most of last year’s spending on London commercial real estate with £9.7 billion, including around £3 billion from Hong Kong and mainland China
London’s commercial property market is on an upward trend, boosted by surging demand for office space and luxury retail assets, prompting industry players to predict annual investment will exceed last year’s £16.5 billion (HK$177.8 billion).
International investors accounted for the bulk of last year’s spend on London commercial real estate with £9.7 billion, including around £3 billion from Hong Kong and mainland China, according to property group CBRE.
Echoing HSBC’s decision to remain headquartered in London rather than relocate to Hong Kong, analysts said London had “safe haven” status underpinned by a stable political environment, attractive legal framework and track record as an international marketplace.
This year, Chinese investment in London commercial property is on track to reach £1.28 billion in just the first quarter – around two-thirds of that coming from Hong Kong, according to Phil Cann, head of UK retail at CBRE.
Although last year’s total investment fell below 2014 levels – when it exceeded £20 billion, roughly in line with its 2007 peak – city office investment hit its highest ever levels.
CBRE said the luxury retail sector is heating up, too. “We have on average about £2 billion of retail assets trade each year; last year it was £3.2 billion,” Cann said.