Hillier Parker - property investment in Central London

Citation

(1998), "Hillier Parker - property investment in Central London", Property Management, Vol. 16 No. 2. https://doi.org/10.1108/pm.1998.11316bab.011

Hillier Parker - property investment in Central London

Hillier Parker ­ property investment in Central London

Keyword Property investment

Investment in Central London property during 1997 ­ which is running at more than £4.29 billion by mid-December ­ is on course to reach its highest annual figure for seven years, according to the latest figures from Hillier Parker. (Central London refers to the West End, Midtown, City and fringes.)

The current figure of £4.29 billion compares with £2.6 billion for the whole of 1996 and is only £37 million less than the all time high of £4.66 billion of the boom year of 1989. The economic recession in 1990 resulted in a fall from the 1989 figure to a low of £1.1 billion in 1992.

Property companies have been net investors however, to the sum of £176 million and accounted for 30 per cent of all acquisitions. This compares with net disinvestment of £129 million in 1996.

Despite the high turnover during 1997, UK institutions remain disinvestors to the sum of £768 million net, approximately £280 million more than 1996. During 1997, however, UK institutions have purchased £861 million compared with only £395million in 1996.

The market continues to be fuelled by overseas investors, who accounted for 47 per cent of all acquisitions by value, although this is a reduction on the 1996 level.

There has been a significant number of large lot-size transactions, including 17 deals in excess of £50 million. Deals of over £100 million include: Embankment Place WC2, Broadwalk House EC2, 23/33 Bouverie Street EC4, Sanctuary Building SW1, 250 Euston Road N1 and 9 Millbank SW1.

The strong demand for development sites and part vacant/part income producing properties has been reflected in acquisitions of this type of property of over £600 million.

Mark Barnwell, Partner in Hillier Parker's Investment Agency, commented: "Based on the experience of the late 1980s, current activity levels could imply a market that is about to peak as investment turnover rises above £4 billion. However, on an inflation-adjusted basis, turnover this year is only likely to hit 73 per cent of that seen in 1989. Furthermore, prime rents on the same basis are at only 49 per cent of the market peak in 1989, suggesting that today's values are sound and that the market will improve further in 1998."