London remains the world’s top destination for commercial property investment, according to a report by Knight Frank released on Wednesday.
The 2019 London Report reveals buyers shrugged off Brexit-related worries to spend £16.2bn on London offices in 2018. This is compared to £14.3bn in Manhattan, £12.1bn in Paris, and £8.4bn in Hong Kong.
While overall investment was down slightly on 2017 (£16.8bn), London still managed to snag the top spot. What’s more, the average deal rose to an all-time high of £81.5m.
Greater China was London’s biggest source of capital, with Chinese buyers accounting for 21% (£3.48bn) of all investment in central London offices last year.
However, the figure has more than halved since 2017, when central London saw a record £7.12bn invested into commercial offices from Chinese investors.
South Korea increased its investment in central London eightfold on the previous year, to spend £2.56bn in 2018.
Capital from Asia as a whole accounted for 47% (£7.67bn) of all investment in central London offices during the year.
“London is the most attractive city in the world for long-term investment. It has proved its ability to adapt to meet the demands of the modern global economy, and this is evident in London’s office market,” according to William Beardmore-Gray, head of Central London at Knight Frank.
“Big banks like Deutsche, tech giants like Apple and Facebook and life sciences groups like GSK are the heartbeat of our capital.
“The growth in co-working space is a positive sign of London’s dynamism and the vitality of the creative economy. London’s resilience and reputation as a safe haven for investment, despite Brexit, is remarkable.
“We see further positive transformation in the pipeline, as London is set to become a centre of scientific R&D and will draw capital from new investors unknown to the market before. London’s potential continues to grow, with new sub-markets emerging in Nine Elms, Stratford, and White City.
“Leaving the European Union will be difficult, but as long as London has fantastic infrastructure and places, great institutions and security, excellence in education, and an abundance of talent, property occupiers and investors will continue to flock here from across the globe.”
Other leading cities included Seoul’s Central Business District (£8.1bn), Frankfurt (£7.4bn), Tokyo (£6.8bn), Boston (£5.2bn), Los Angeles (£4.5bn), and Chicago (£4.3bn).