Total annual commercial investment volumes in the City of London reached a new high of £12.64bn last year.
Investment into commercial property in the capital hit £12.64bn in 2017, surpassing 2016’s volumes by 56% and the 10-year average by 57%, according to Savills.
Volumes for the first three quarters of 2017 alone reached £8.5bn, exceeding the full-year total for the whole of 2016.
With a further £2.23bn transacted across 23 deals in December alone, by year end 2017 volumes had overtaken 2014 to become an all time record.
According to Savills, 2017 turnover was driven by an increased demand for trophy assets. The 10 largest deals of the year totalled £5.5bn, compared with £3.1bn in 2016.
The average deal size for 2017 was £93.66m, up 83% on the 2016’s equivalent figure and the highest ever average deal size recorded within the City market.
Asian buyers remained the most active investor group in 2017, accounting for 52% of total City turnover, significantly ahead of European buyers (14%) and UK buyers (12%), but in total 28 different nationalities acquired real estate in 2017. Savills says it expects the demand from overseas investors to continue in 2018.
Richard Bullock, director in the central London investment team at Savills, said: “2017 saw unprecedented demand for the City of London with record-breaking deals and an all time record transaction volume achieved by year end.
“Asian buyers, particularly those from Hong Kong, dominated activity as prime yields in London City offices at 4% continue to look attractive to those in their home markets (sub 3%).
“More than 28 nationalities chose to deploy capital in London in the 12 months to December to include a pick up in activity amongst UK buyers.
“This level of interest has remained consistent in January and we anticipate strong demand for City assets through-out 2018.”