Demand surges for City offices as deals top £550m

INVESTOR appetite in London for City office buildings looked to have reached its highest level so far this year in May, with more than £550 million of transactions done.

Interest for sites in the Square Mile comes despite many buildings still being much emptier than normal due to working from home guidance. Some firms are betting that occupier demand will hold up for modern and environmentally-friendly workplaces.

According to property agent Savills, £558.5 million of sales were agreed last month. It said that marks the highest May turnover since 2018.

That was also the highest monthly figure so far in 2021, helping total City investment volumes for the year to date reach £1.37 billion across 20 deals.

Purchases in central London this year include a consortium led by Wing Tai Properties Limited, a Hong Kong-based firm, agreeing to pay £255 million for a office block near Chancery Lane station.

Stephen Down, head of central London investment at Savills, said: “Investors are positive about the long-term future of London offices, particularly as the pricing of assets is currently highly competitive with other European countries.”