City deals spurred by record year of South Korean investment
South Korean investors have pumped record levels of cash into London’s commercial property market over the last six months in fresh evidence of burgeoning Asian demand for City buildings.
Office investment into the UK from South Korea reached £1.1bn in the first half of 2018, doubling last year’s total level of £530m in the whole of 2017, according to exclusive research carried out by Cushman and Wakefield for Morning Wire
The bumper year of investment has been driven by four deals in Central London which all topped the £200m mark, including the £340m purchase of the City’s 20 Old Bailey by Mirae Asset Global Investments.
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The latest figures show a significant uptake in trophy office buildings in the Square Mile, as Cushman analysts predict that South Korean investment could swell to as much as £4bn by the end of the year, with several big deals still on the horizon.
One such landmark deal will likely be the Goldman Sachs new headquarters on Shoe Lane, which two Korean bidders are fighting to buy for £1.2bn.
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“Historically Korean money has gone to America, but in the last few years it has flowed to Europe because the dollar has strengthened and the cost of finance in the US has risen dramatically,” according to Cushman advisors Jonghan Kim and Argie Taylor.
Taylor added: “London has been off the radar since the Brexit vote, until the end of last year when Samsung bought 200 Aldersgate. Since then Koreans have followed because London is the leading gateway city of Europe.”
City dealmaker and CBRE head of London investment properties James Beckham said: “The South Koreans clearly have an appetite to diversify globally and the long income streams in the London market are attractive.”