Property investors flocked to buy West End offices at the end of the year as hopes surrounding Covid vaccines improved, with over £1 billion of sales agreed in December, data shows.
Although recent figures showed overall spend on central London offices, stores and office and retail development sites, tumbled in 2020, Savills showed the West End office investment market ended on a positive note.
The property agent today said West End office transactions in the last three months of 2020 reached £2.9 billion, which is 38% above the five year average for final quarters.
Savills said that December’s turnover of £1.16 billion across 12 transactions was the highest monthly volume of the year and that this single month was responsible for approximately 25% of the total amount transacted in the West End over the whole of 2020.
Deals last month including British Land selling a 75% stake in a portfolio of three buildings to investor Allianz Real Estate for £401 million.
Confidence to invest followed a much quieter first half of the year, as London became a ghost down due to travel restrictions and many people working from home since the first Covid-19 lockdown started in March.
There have been some concerns remote working will be embraced full-time, but buyers believe demand for the best offices will hold up.
Paul Cockburn, director of West End investment at Savills, said: “The West End is one of the best linked and dynamic areas of London, so we’re confident that once Covid restrictions are lifted it will still be a place people want to work, shop, visit and play. This will then, of course, loop back into strong occupier activity and an unwavering belief in the merits of buying quality assets.”
Stephen Down, head of central London investment at Savills, said: “The scale of uplift seen in Q4, particularly in December, shows the scale of the pent up demand for London assets and should hopefully be repeated once the current lockdown ends, boding well for the middle and later parts of 2021."