Asian investors have been splashing out record sums on offices in London.
Buyers from the region spent £3.2billion on commercial property in the capital during the latest financial quarter, snapping up about 68 per cent of all offices sold.
The biggest buyer was Hong Kong food conglomerate Lee Kum Kee, best known for its oyster sauce, which spent around £1.3billion on the City’s ‘Walkie Talkie’ skyscraper in the UK’s biggest ever single asset transaction.
Overseas investors were the biggest buyers for the fourth year in a row, buying around 94 per cent of all property sold.
UK investors sold around 65 per cent of the property sold during the period.
Asian investors splashed out £3.2bn on around 68 per cent of London’s commercial property space in the last financial quarter
The fall in the pound since the Brexit vote has made properties cheaper for foreign investors, while it is thought Chinese and Hong Kong investors may be particularly keen to take move cash out of their home country due to potential Chinese real estate market instability and regulatory crackdowns.
Investors are also keen to diversify their portfolio and get a stake in London’s property market which commands huge confidence internationally.
Stephen Pearson, head of City investment at CBRE, which analysed the latest figures, said: ‘Asian buyers were the largest overseas investor in Q3 2017, transacting £3.2billion and representing 68 per cent of all office transaction volume.
‘This highlights the continued appetite for London offices among Asian investors who have deployed £6.4billion into office assets so far this year.
The biggest buyer was Hong Kong food conglomerate Lee Kum Kee, best known for its oyster sauce, which spent around £1.3billion on the City’s ‘Walkie Talkie’ skyscraper (pictured left) in the UK’s biggest ever single asset transaction. In March the Leadenhall Building (pictured right), the tallest building in the City also known as the Cheesegrater, was sold to Hong Kong-based CC Land for £1.15billion
‘Pricing has remained firm for trophy assets in the capital and the continued high levels of demand are likely to be satisfied by the availability of stock, especially in the City.’
The sale of the Walkie Talkie building at 20 Fenchurch Street in July was the second instance this year of an iconic City tower being purchased by a Hong Kong investor for more than £1bn.
In March the Leadenhall Building, the tallest building in the City also known as the Cheesegrater, was sold to Hong Kong-based CC Land for £1.15billion.
CBRE said there were 11 sales of more than £100million over the latest quarter, compared to just five in the same period last year.
Overall £4.8billion was spent snapping up London’s offices during the third quarter, 64 per cent more than the year before.