Asian Investment Increases 150% in London Office Market

According to Jones Lang LaSalle, Asian investment into the London office market has increased 150% since 2010. In 2011, Asian investors were responsible for $2.2 billion of $13.9 billion in transactions in the investment market of Central London. Asian economy is on the rise despite lessening demand in Europe, as well as the festering debt crisis. Real estate industries in the region, however, are passing muster.

Jones Lang LaSalle’s International Capital Group’s Alistair Meadows said “During 2011 we have seen Asian investment into London more than double. What has been evident is the emergence of ‘new’ sources of Asian capital attracted to London ranging from pension funds like EPF & PNB from Malaysia to Ultra High Net Worth (UHNW) investors like Khoon Hong Kuok and Martua Sitorus who acquired ‘Aviva Tower’ in the City of London for 288 million euro, advised by LaSalle.

“Asian buyers were especially dominant in the City of London office market, accounting for 23 percent of annual investment volumes. Indeed, of the 3.5 billion euro traded in the City office market last year is many sizes over 100 million euro. 40% was undertaken by Asian buyers. We predict seeing a diverse range of Asian investors being very active in London in 2012 and likely to account for over 20 percent of investment volumes by year end.”

Andrew Hawkin, also from LaSalle, added: “Over the next 12 months Asian money will also continue to target the City for higher income returns, and the West Ed for long-term wealth preservation, reinforcing London’s perception as a safe haven. Already in 2012 Malaysian capital is rumored to have placed the majority of a major German portfolio under offer in the City. London’s transparency, relatively long leases and high yield spread above the risk free rate, continues to be attractive to Asian Capital seeking to diversify away from their home markets.” He noted that the trend is likely to be long-lasting.