London’s West End investment market set a new quarterly record in Q1 of 2017, with the average deal size hitting £86m, exceeding the previous Q1 high by 45%, said Savills.
The real estate advisor said that transactions in the market totaled £1.89bn in the first quarter, boosted by volumes of £558m across 10 deals in March.
This was the second largest Q1 turnover figure ever and 30% above the five-year average, according to Savills.
The first quarter saw 22 transactions in total, with key deals including AXA Investment Managers, advised by Savills, acquiring the Warwick Building in Kensington for £56.6m, reflecting a net initial yield of 5.19%. This former Victorian warehouse totals 79,506 sq ft of office space, let to PG Media Services Limited until 2021 at £39.90 per sq ft.
Paul Cockburn, head of the West End investment team at Savills, said: “Such strong quarterly data clearly reflects how robust investors see the West End market dynamics. One of the biggest challenges our market faces is supply and persuading owners to part with their prized assets.”
The report also showed prime yields in London’s West End market remained at 3.25% for the fourth successive month.