The attraction of London office space has drawn in a number of overseas developers in the last three weeks totalling over £2 billion of investment in the capital.
Office rents have risen by 12 per cent over the previous quarter due to a lack of suitable construction projects and the resulting customer bidding war.
Stephen Down of Gresham Down Capital Partners investment consultancy said: “Five weeks ago the fear was that there was too much stock on the market but the appetite of buyers has been voracious”.
“US opportunity fund Carlyle has just bought six London office buildings, comprising the White Tower portfolio, from receivers for over £670 million. Gresham Down itself has been advising a private Eastern European investor who has just acquired Mitsubishi Estate Company’s Bow Bells House, a trophy City asset for £140m”.
Down is also advising investors selling River Court. He said: “This is a good example of the type of trophy stock that appeals to the overseas market”.
He continued: “It has been owned by the same group since it was developed in 2000 and is let to Goldman Sachs for another 15 years. It is a modern Grade A building secured to an international tenant on a long lease and the rent is low at only £36.00 per sq ft overall compared with recent lettings on similar space at over £50.00per sq ft. It offers the investor access to the growth in rents over the next three to four years”.