London commercial property investment in 2014 close to 2007 peak

Commercial property investment in London in 2014 amounted to £20.5bn, matching the peak levels of 2007.

Research revealed this week from Cushman & Wakefield reported that the City of London & Docklands finalised transactions of £5bn in Q4 alone, with the remaining £13.8bn coming from the rest of 2014.

The investment market was dominated by overseas traders, who made up 74% of investors for 2014 as a whole, while the level of total investment seen in 2014 was only marginally below that of 2007, when £20.6bn was exchanged.

Commenting on the data, Head of City of London investment at Cushman & Wakefield, James Crawford, said: “The international appeal of London continues with an ever-increasing spread of new global investors entering the market and there are no signs of an imminent slowdown.”

With demand continuing to outstrip supply, it is expected that the huge amounts of investment into the London market will continue in 2015, putting extra pressure on yields.

Speaking about the prospects for 2015, James said: “The first half of 2015 shows all the early signs of a continuation of last year, but we expect some profit taking to occur later in the year and uncertainty around the general election in May”

“We estimate there is £250bn of liquidity in the market available for direct investment in property, when this is combined with an improving debt market, a severe supply-demand mismatch.”

The uncertainty surrounding the general election is an expected trend for 2015, with those in the industry reserving an air of caution that will remain until things settle down.

It seems therefore that London is set for another year of massive investment, but question still remains over whether supply will be able to meet demand, and what impact May’s general election will have on the market.

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