Savills recorded 25 transactions, showing a 20% reduction in volume but only 10% fewer trades when compared to the five-year average. With trades above £100m largely absent key liquidity was in the sub-£50m range.

Headline inflation persisting above the Bank of England's target rate and geopolitical uncertainties continue to influence market dynamics, Savills says. With interest rates holding steady at 5.25%, GDP growth is expected to return, albeit modestly, from a recent technical recession. Supply constraints also persist in the West End market, with signs of distress limited and owners keen to hold out than trade at strong discounts. However, despite these challenges, the buyer profile remains diverse, with institutions, private investors, and private equity firms actively participating. Emerging trends indicate growing interest from the latter in particular, as private equity, driven by the belief that pricing corrections may have stabilised, consider the West End offers opportunities for attractive returns.

Paul Cockburn, Director, Central London Investment, Savills, says: "It feels like it has been a long quarter but liquidity is improving and turnover data is on the up, albeit off a low base. There have been other micro-signals of the mood turning. We are seeing more buyer enquiries and some vendors are taking more aggressive positions on sales. Some values are still at risk, but with greater clarity on pricing coming through, we could be close to the market bottoming out, especially for better quality options."

A flight to core assets continues in the West End, according to Savills, with prime submarkets such as Mayfair, St James, Fitzrovia, and Covent Garden performing well. Additionally, repositioning opportunities are attracting investor interest, as seen in the ongoing sale of The William, with a focus on alternative residential value. Strong fundamentals support rental growth, highlighted by recent deals such as The Acre, Evercore, and Merlin Entertainment transactions.

Read Savills March 2024 West End Investment Watch in full here

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Savills plc published this content on 10 April 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 April 2024 09:30:00 UTC.