Businesses splash £5bn on London offices as overseas firms eye UK capital
Businesses have splashed £5bn on office assets in London in the first few months of this year – the highest level of investment since 2018, commercial real estate services firm Avison Young has revealed.
The figure is more than double the amount spent in the same quarter last year, buoyed by recent high-value deals.
The capital’s office market has boomed since the start of 2022, according to several of the city’s top real estate agents, flying in the face of the popularity of flexible working.
With swaths of London hooked on home-comforts while working, businesses have been stepping up their game in terms of what their offices offer staff – from lounges to break-out kitchens, and green screen-work spaces for video calls.
International companies have been leading the way in terms of forking out the highest figure for prime London office spots.
Korea’s National Pension Service dished out £1.2bn on UBS’ City headquarters at 5 Broadgate in the period, alongside Google, which bought Central St Giles in the West End for an initial consideration of £762.5m.
Singaporean property investment fund Ho Bee Land has also paid £718m for the City’s The Scalpel skyscraper.
“The increasing optimism that we saw across last year led to the best opening quarter since 2017 in terms of overall spend on London offices,” principal of central London investment at the Toronto-based investment fund, Chris Gore.
However, Gore said that it would be “foolish” not to point to worsening inflation levels and further interest rate rises which could send a chill through the steaming market.
“That being said, the auspicious start to this year is set to be well-supported by other structural trends within the London office market, including the ongoing return to a ‘new normal’ as we travel both to offices and internationally with some regularity again, and we are confident in London’s ongoing resilience,” he added.