City real estate investment volumes rise 85% on 2020

The international real estate advisor says that with £1.60 billion of assets under offer at the start of September 2021 it anticipates that this year’s City investment volume will shortly overtake 2020’s, with the traditionally busy final quarter yet to come.

According to Savills there has been an increase in the number of larger assets (£100 million+) being sold, with an average lot size for the year of £91.0 million compared with only £67.0 million across the whole of 2020 and a 5-year average of £72.60 million. 2021 has already seen 12 transactions over £100.0 million, accounting for 76% of total turnover, with a further six of this size also currently under offer and seven further assets being openly marketed totalling approximately £3.5 billion.

European investors have been the leading buyer group within the City in the year to date, acquiring £1.45 billion worth of assets accounting for 34% of total volume, followed by US and UK buyers at 29% and 17% respectively, according to Savills.

Stephen Down, head of central London investment at Savills, comments: ‘We’ve seen very strong appetite among those investors who have been active in the City for best in class assets at higher price points, but they are beginning to be joined by buyers from Asia Pacific and the Middle East whom, although still facing travel issues, are now beginning to return and are keen to buy. This deepening pool of buyers is set to maintain values and keep yields low for the immediate future.’

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Savills Prime City Yield remains at 3.75%, the record low it first fell to in August.

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