Nothing quite like reading in the Wall Street Journal about “another” sign that a corner may have been turned in the property market. It’s referring to the acquisition by Union Investment of the eight-story office building 10 Gresham St for £141.5m. The paper reports that this is just one of several transactions giving hope to market players.
The acquisition, one of several deals in the past few weeks, is bolstering the view that London’s commercial-property markets have stabilized and prices have likely hit bottom. The volume of investment in commercial property in the West End, City and Docklands areas of London more than doubled in the second quarter to £1.4 billion from £679 million in the first quarter, according to property consultant Cushman & Wakefield. This marks the first time in two years that investment in Central London commercial property rose.
The article notes that investors are probably more interested in reaping the benefits of the UK’s weak currency than they are confident in making a return on rental increases. Yields, it speculates, may have fallen to 6.5 percent from 7.5 percent at the beginning of the year.