South east property 2nd April 2014

Global property investors have dramatically increased their commitment to South East offices with Middle Eastern, Israeli, Malaysian and Japanese investors completing more than £200m of acquisitions in the region in the past nine months.

Market expectations that the weight of global capital chasing prime London stock would force investors to look further afield, with South East offices the first port of call, have grown over the past two years but few deals had completed until the second half of last year.

While UK funds remain the largest investors in South East offices, overseas parties from the Middle East and Asia have completed more than £200m of acquisitions in the market since July of last year having previously being almost entirely absent. The number of overseas bidders tabling bids has also grown significantly.

Tim Smither, head of South East Office investment at Knight Frank, said: “Private global investors are undoubtedly making inroads into the South East markets and other prime regional office markets as the combination of reasonable yields and long leases prove increasingly attractive.”

He added: ‘These investors were previously trophy hunting but will now compete aggressively for mid-term income in reasonable markets as opposed to going for the absolute best.”