Conditions ripe for Japanese commercial investment boom in Central London
London is likely to see an influx of Japanese investment into Central London offices in 2019, as Yen buyers find office investments a third cheaper compared to three years ago, according to the latest data. Analysis of the Central London offices market reveals the significant currency discounts for global investors over time. Compared to the previous market peak in 2015, Japan has the biggest discount on the West End offices market, with Japanese investors paying 31.2% less in Q4 2018. In 2018 Japanese investors spent £222 million on Central London assets. Major deals in 2018 included the £154m acquisition of First Avenue House on High Holborn, by a Japanese private client of Sumitomo Mitsui Trust Bank (SMTB) and Knight Frank. The deal was the sixth largest private purchase in London last year. Central London remains a compelling destination for long-term investment, with the value of the pound providing a strong incentive for international investors in 2019. Japan is in a leading position relative to other nations, and expect to see Japanese interest in the London market translate into higher investment activity in 2019. Japanese investors are now expanding their Central London appetite into a wider range of sectors in 2019, including Hotel, Logistics and Residential as they look to diversify out of Japan. Investors can expect discounts of up to a third on 2015 values for West End offices, which combined with Japan's ongoing programme to diversify its public purse, means London is very well placed for significant investment in 2019.
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