London’s West End sales market is being dominated by activity by UK private property companies and REITs, says Savills, with such sellers responsible for over 45% of turnover in the market to the end of April.
The international real estate advisor says that sales by UK private property companies and REITs were responsible for £1.17bn of the £2.49bn transacted in the first four months of the year in the West End.
It is too early to tell whether these categories of sellers will exceed the full-year record of £2.28bn of sales set in 2015, says Savills, but levels for 2017 have already reached 96% of the 10-year average annual turnover.
April saw transaction volumes of £578m across 11 transactions, including the sale of the Grosvenor Victoria Casino by Aprirose, advised by Savills, for £70m reflecting a net initial yield of 4.29%, and WELPUT’s sale of 3 St James Square to Joint Treasure for £135m, reflecting 3.96% net initial yield.
Paul Cockburn, head of the West End investment team at Savills, said: “While it’s still early days, no one will be surprised if 2017 sets a new record for sales by UK property companies and REITs.
“The fall in the value of the pound and a subsequent influx of overseas investors has seen demand remain high for good quality assets.
“Savills was involved in over 25% of transactions by volume across the first four months of the year, and with over £450m of live sales the lead into summer will be a particularly busy time for the market.”
Savills says prime yields in London’s West End market remain at 3.25% for the fifth successive month.
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