London remains top global city for real estate investment

London remains by far the biggest global destination for investment in real estate, despite ongoing uncertainty around Brexit, with £16.2bn invested in the UK capital’s commercial offices in 2018, according to Knight Frank data.

This compares to £14.3bn invested in Manhattan, £12.1bn in Paris and £8.4bn in Hong Kong. While total investment volumes for Central London were down slightly on 2017 (£16.8bn) the average deal size rose to an all-time high of £81.5m in 2018. 

Greater China remains the largest source of investment in Central London real estate, despite new capital restrictions imposed this year, accounting for £3.48bn 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 invested into commercial offices from Chinese investors.

South Korea significantly increased investment in Central London in 2018, with £2.56bn invested in the capital, an eight-fold increase on the £300m invested in 2017. Capital from the Far East as a whole accounted for 47% (£7.67bn) of all investment in Central London offices in 2018.

Nick Braybrook, Head of Central London Capital Markets, Knight Frank said:

“Although 2019 presents ongoing challenges, international investors remain undeterred. Our Global Capital Tracker identifies £40 billion still targeting London this year, with some seeing the political turbulence and currency weakness as an opportunity, combined with the strong occupational market fundamentals.”

james.wallace@realassetmedia.com