Investment in Central London Commercial Property Rising

Signs that banks are beginning to open their doors to commercial property companies and a rise in demand from foreign investors for offices in Central London have prompted claims that the next bubble in values may already be forming.

Figures released yesterday show that investment in commercial property in London grew in the three months to the end of September for the second consecutive quarter — the first time that the capital has recorded two consecutive quarters of investment growth since mid-2007.

Investment in Central London, which includes the West End, the City and Docklands, rose more than 12 per cent in the third quarter to £1.6 billion.The dominant buyers continue to be overseas investors attracted by the weak pound and the very attractive returns achievable resulting from London’s relatively rapid price correction compared with other markets across the world.

The market received a boost from the Libyan Investment Authority, which paid £155 million for Portman House in the West End in July, and the recent sale of a 50 per cent stake in British Land’s Broadgate development to Blackstone, the American private equity group, for just over £1 billion.
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