Investors spent nearly £3bn on London offices in Q3
(Picture: AFP via Getty Images)Investor appetite for central London office buildings has bounced back to surpass pre-Covid levels, with nearly £3 billion spent over the last quarter, figures show.
Buyers are betting that occupier demand for high-quality and modern workspace will improve, even as many firms embrace flexible working and some bosses look to reduce office sizes.
Preliminary data from property agent JLL, compiled for the Evening Standard, shows around £1.5 billion and £1.4 billion was spent respectively on City and West End office buildings in the three months to September 30.
That is well ahead of the £1 billion spent a year earlier when travel restrictions and lockdowns made deals tougher. There were also jitters about tenant demand as people worked from home.
But the spend is also ahead of the £2.6 billion invested in the third quarter of 2019, amid buyer uncertainty about Brexit and the prospect of a general election.
Year-to-date total spend on central London offices has reached £7.5 billion, up from £4.1 billion last year.
Purchases in the past three months have included Derwent London acquiring 250 Euston Road in a £190 million deal.
Julian Sandbach, head of central London office markets at JLL, said: “Investors are increasingly optimistic about London’s economic prospects in a post-Brexit environment and are encouraged by enhanced occupier activity and the positive return-to-work messaging.”
He added: “The final quarter is always the busiest and with more deals in traction than at any other point in 2021 we expect a strong finish to the year.”
