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Proportion of foreign investors in London offices spikes as Europeans edge out Asians

proportion of overseas cash being ploughed into London office buildings has hit a record high as a trio of deep-pocketed investors from mainland Europe jostled with others from Hong Kong and Korea in signing a string of multi-hundred-million pound deals. Foreign buyers spent £3.8bn on offices in central London in the three months to September, accounting for 92pc of the total investment, according to figures from property advisors CBRE. The market has traditionally been dominated by Asian investors in recent years but they were edged out by Europeans including Germany’s Deka, which splashed out £457m on the Verde building in Victoria and £86m on another site on Chancery Lane. Other top European investors included Amancio Ortega, founder of the Zara fashion chain, whose Pontegadea business spent £550m on the Adelphi building in the West End. Meanwhile Norway’s state-backed Norges Bank bought Amazon’s headquarters, Sixty London, in Holborn for £321m. CBRE’s James Beckham said the flurry of mega-deals reflected overseas investors’ continued confidence in the capital, despite uncertainty around Brexit. He added: “Attractive yields relative to other European cities, coupled with the comparative weakness of sterling, mean we have seen investors from all corners of the globe hungry to deploy capital in London.” European investors spent £1.7bn in total, ahead of Asians with £1.5bn, domestic investors with £421m and North Americans with £171m. But it was Korea’s National Pension service that inked the biggest deal, agreeing to pay £1.2bn for Goldman Sachs’s new City headquarters, which is still under construction. Total investment came in at £4.3bn, down from £5.1bn in the second quarter and £4.8bn the year before. Mr Beckham said: “There may be some hesitancy from a few investors over the next six months as we enter the latter stages of the Brexit negotiations, but total investment volumes for the year look set to be broadly on par with 2017”.

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