London remains the market of choice. The volume of investment deals for London property this quarter is exceptional: £7bn of the quarterly total of £11.6bn was for commercial property in the capital. This is almost double the half year total of £7.4bn and equates to quarter-on-quarter growth of 70%.
Central London offices account for 70% of deals
Central London offices were the main driving force in Q3, accounting for 70% of the £7bn invested in London commercial property.
James McAdden, Associate Director, Central London Capital Markets, said: "Central London continues to attract inflows of capital from around the world. IPD’s total return figures for September 2013 were 1.15%, whereas the West End outperformed at 1.48%. The 12 months to September showed total returns for UK offices of 8.8%, with the West End outperforming at 13%.
Prime yields at lowest level since early 2007
"In the West End, 8.8% of performance was contributed by capital growth, emphasising the weight of money attracted to London. Prime yields fell to circa 3.75-4.00%. Prime yields are now at their lowest level since early 2007."
For our latest report of the UK property investment market, read UKIT Q3 2013