Buyers swoop in record spree on London retail propertyComments Off on Buyers swoop in record spree on London retail property
Overseas buyers are set to fuel a record £2 billion-plus shopping spree on London retail property this year, despite the impact of the Brexit vote, industry experts have said.
Buyers have spent £1 billion on central London retail in the first half of the year, outstripping the £700 million first-half average of recent years, according to agents CBRE. In August alone a further £450 million in property is set to be sold, it adds.
Among the biggest retail properties changing hands in central London this year, in the teeth of uncertainty over the UK’s status in the European Union, include the sale of Oxford Street’s Debenhams to Stefan Persson, the billionaire chairman of high street fashion chain H&M, for £400 million.
Hong Kong tycoon Joseph Lau splashed £183 million on Zara’s new store at the east end of Oxford Street, while Sports Direct billionaire Mike Ashley also got into the action, spending £108 million on 167 Oxford Street to act as a new corporate headquarters as well as a first flagship store for its luxury online fashion brand Flannels.
CBRE’s head of UK retail Phil Cann said between £1.6 billion and £2 billion of retail property usually changes hands in central London every year.
“Buyers are still very happy with the London story.”
He said: “I think there is every chance [of a record] this year. Given the amount of bidding activity we have seen, there is still a significant amount of equity tracking London retail and it shows that buyers are still very happy with the London story.”
Hong Kong and Singaporean buyers are particularly active in the current market, Cann added.
Overseas investors represented almost two thirds of trading volumes in the first half of the year, a trend set to continue given the fall in sterling since Brexit, making London assets even more attractive.
The same trend is boosting the spending power of overseas visitors, again heightening the appeal of hot spots like Oxford Street.
London retail has already broken one record, when the New Bond Street home of luxury watches seller Piaget sold for £65 million. The deal worked out at £18,800 per square foot, the highest paid for any UK retail property.
Despite the buoyancy of the retail scene, the City property market has seen more mixed fortunes since the vote.
While US bank Wells Fargo has committed to a new £300 million UK headquarters in the Square Mile, a host of other projects are under review since the vote as uncertainty surrounds the City’s trading relationship with the EU.