New figures suggest that investment levels in central London commercial property are close to hitting their 2007 peak. This week Simon Morris explores what this means for UK property investment funds.
A Right and a Wrong Time to Invest in Property
A property consultant based in London, Simon Morris uses his industry experience to show UK property investment funds how they can invest effectively in the UK property market.
Simon’s experience has shown him that there is a right time and a wrong time to enter a property market. This can be determined by the rate of capital flowing into a particular sector of the UK property industry. New figures suggest this could be the right time to plough funds into central London commercial property.
Investment in Central London Commercial Property Hits £20.5 Billion
According to Property Wire, the latest figures from global real estate adviser Cushman & Wakefield show that investment in central London commercial property hit £20.5 billion in 2014.
This is the highest level of investment this sector has seen since 2007, when they measured £20.6 billion. Further data from Cushman & Wakefield shows that this profitable sector looks like it’s set to experience a lucrative 2015. Demand is set to remain steady, yet a lack of available central London commercial properties means that it’s set to outstrip supply by a country mile.
A Strong Year for the City of London and Docklands Market
Further analysis of these figures shows that 2014 was a particularly strong year for the City of London and Docklands market. Investment levels in this lucrative area measured £5 billion in the final quarter of 2014 alone. This is the strongest quarterly volume ever seen in the market.
Cushman & Wakefield’s head of City of London investment, James Crawford, commented on these figures. Crawford said: “We saw a strong City of London investment market in 2014 with international investors dominating acquisitions. 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.”
Take the Safe Approach
In Simon Morris’ opinion, Crawford’s words could be applied to the entire central London commercial property market. It could prove highly profitable for UK property investment funds in 2015. Yet the fact that investment levels in this pivotal sector are close to their last peak suggests that you should take the safe approach if you wish to invest in central London commercial property.