Asian Investors Dominate London Office Investment In 2022

UNITED KINGDOM – Data from Knight Frank showed that office investment deals in Central London edged up by 7 percent year-on-year to £13.2 billion, reported Property Magazine International on Wednesday evening (28 December, SGT).

By value, investors from Asia Pacific accounted for the lion’s share (36 percent) of the office investments, followed by North America (19 percent), the United Kingdom (17 percent) and Europe (17 percent).

The biggest office transaction was Hong Kong-based CK Asset Holding’s purchase of 5 Broadgate for £1.2 billion that is currently leased by UBS. This is followed by Land Securities Group’s £809 million acquisition of 21 Moorfields, which was fully pre-let by Deutsche Bank. At 3rd place is Singapore’s Ho Bee Land, which picked up The Scalpel for £718 million.

Moreover, total office leasing volume in Central London increased by 24 percent year-on-year to 10.9 million sq ft in 2022, but it’s still below the annual long-term average of 12.3 million sq ft, as completions of new office developments continue to face delays.

In particular, letting volume for high-end, green-certified office buildings rose 27 percent on an annual basis to 6.5 million sq ft, which accounted for 60 percent of the overall office leasing demand in central London.

“Despite a series of economic shockwaves, the London office market continued to demonstrate robust letting volumes in 2022, fuelled by the drive to occupy better quality buildings that can deliver enhanced workplace experiences,” said Knight Frank’s London Research Partner Shabab Qadar.

“This is a trend that has intensified over the past couple of years, with factors such as sustainability credentials and wellbeing amenities becoming more central to office strategies. The 6.5 million sq ft of newly developed and refurbished lettings this year is the highest since 2019 and driven by a record level of take up of refurbished buildings of 3.7 million sq ft that exhibit many best-in-class qualities.”

By sector, financial service providers made up the majority of the office take-up in Central London, leasing 2.8 million sq ft of new office space in 2022 versus 1.8 million sq ft in the prior year. Law firms were also active in the office market, renting 1.4 million sq ft (a record-high for the industry) versus 1.1 million sq ft during the preceding year.