Investors pour £1.3bn into West End assets

Property investors splashed out £1.3bn on West End assets in Q4, with buoyant trading continuing into the present quarter.

A total of £1.3bn was made across 25 deals in the West End between October and December, Colliers International has calculated.

Around half of the value can be attributed to three major deals, including Swedish pension fund Första AP-fonden's £229m purchase of One Kingdom Street in Paddington, W2, exclusively revealed by Estates Gazette in October.

The average lot size of the other 22 transactions was around £30m, said Colliers.

The transactions were 32% lower than the £1.9bn recorded in Q4 2010, however lack of grade-A availability is blamed on the fall.

Dominic Amey, head of West End investment at Colliers, said: "Global economic uncertainty over the past couple of years has led to significant interest in prime London property as a safe haven, particularly for private wealth. This is illustrated by the fact that around 60% of the West End transactions in Q4 2011 were to private buyers, most being overseas."

Around £4.7bn, made up of 118 separate transactions, was made in 2011 in the West End; a 10% decline on the £5.2bn over 128 transactions made the previous year.

Key deals in the present quarter include Schroders-managed WELPUT paying £65m, reflecting a 5.94% yield, for Warner Bros' HQ at 98 Theobalds Road.

Agents claim a number of assets will be coming to the market this year as key leases expire.

Amey added: "With continuing global uncertainty we definitely expect strong interest for product in the West End, leading to further increases in capital values for core stock throughout 2012."