London prime retail property unaffected by Brexit in H1
The Brexit vote appears not to have affected investment in prime retail property in London, which reached £1bn in the first half of the year.
This is a huge increase from the H1 average of £700m seen in recent years, and the total investment for the year is set to rise substantially, with a further £450m worth of deals set to complete in August.
CBRE says investors see central London retail as being "relatively protected from the macroeconomic headwinds that have caused nervousness in other markets." Overseas investors represented 60% of volumes in H1 and benefited from the drop in sterling.
Recent deals include the sale of 169 New Bond Street for £65m – at a record £18,800 per sq ft, this was the highest capital value per sq ft paid for any UK retail asset to date.
Phil Cann, Head of UK Retail at CBRE, said: “London shops have been seen by many as the ultimate safe haven investment, with buyers bucking the ‘wait and see’ trend we have seen in other sectors. The strong H1 investment volumes are even more remarkable when considered against the backdrop of uncertainty created by the EU referendum and what is normally a typically slower first half.”
“The rationale for investing in UK real estate has naturally been questioned in the light of the decision to leave the EU, but the fact is the UK retail market is underpinned by strong fundamentals – a mature e-commerce model, a sophisticated logistics network, and diversity in retail locations, and London remains a powerhouse at its heart.”
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