According to data from Knight Frank, the London office market produced its best performance since 2000 last year with take-up of office space in central London rising by 16% to 15.9 m sq ft. This is well ahead of the ten year average figure of 13.0 million square feet.
Knight Frank is reporting this week the total volume of hotel investment transactions in the UK increased by 90% in 2014, reaching an impressive eight year high of £4.3 billion ($6.5 billion).
According to CBRE, the European Central Bank (ECB) unveiled a EUR 1.1 trillion quantitative easing package to stimulate the Eurozone economy for the next 18 months and this will have a mixed impact on the APAC real estate market.
Market conditions are now firmly in the landlords' favour. High levels of take-up and constrained development activity over recent years have seen vacancy rates drop dramatically from their 2009 peaks.
Spain’s richest and world’s fourth wealthiest Amancio Ortega has purchased the headquarters of multinational mining and metal group Rio Tinto located in the heart of London, reports Property Week. The founder of Inditex is said to have paid around £265 million, or €335 million.
‘Looking ahead to 2015 we expect that total returns will remain in double figures, but that rental growth will make a larger contribution. The recovery in the economy combined with low levels of development means that the balance between demand and supply is now swinging in favour of landlords and we anticipate that rental growth will accelerate,’ explained Owen.
If we take the temperature of investors in commercial property right now, we would find warm support for the sector in the UK. In a low interest rate environment, and with returns from property far outstripping bond yields, commercial real estate has returned to favour. The UK commercial property market has performed strongly in 2014, with the sector returning 14 per cent during the first nine months of this year, according to the IPD UK Monthly Property Index. Capital values have also recovered by 28 per cent from their trough, although they are still 29 per cent below their excitable 2007 peak. But will this upward trajectory for commercial property continue in 2015, and does the sector offer good prospects for investors?
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