According to new data from the real estate arm of BNP Paribas, American investment in London property has jumped to its highest level in eight years.
According to BNP, US investors spent £1.9bn on London commercial property from January to March, a 64 per cent rise from the previous year and the highest level of investment since 2015.
“This positive uplift into this new cycle tells us US capital is firmly back in the market,” said BNP Paribas Real Estate’s head of central London capital markets Fergus Keane, adding that political tensions in the US were “certainly at play” in encouraging investment in the UK.
Significant deals have included MCR Hotels’ £275m purchase of the BT Tower and Elliott Management and Oval Real Estate’s £300m acquisition in the West End.
“Confidence has been missing for two years, but if you look at our data on the market, two consecutive quarterly increases in investment volumes certainly signals the start of its return,” Keane said earlier in the month.
“It’s often only with hindsight that you can see when one cycle ends, and another begins, and the trigger is often a spate of deals that turns sentiment and begins to build real momentum. It’s clear to me that some of those moments have arrived,” he added.
The investment figures are a sign of green shoots in the London property market after a spate of abandoned deals in the office market earlier this year.
Britain is set to be the biggest beneficiary of US investment into international real estate, with around £10.4bn ready to be injected into the UK market, an increase of around a third year on year, according to research from property consultants Knight Frank.
Recent data from Costar shared exclusively with City A.M. showed a jump in demand for property from hotel owners, particularly in the office-to-hotel space.
Costar said office-to-hotel sales volumes in the UK increased by around £386m in 2023 up from £55m in 2022, accounting for four per cent of total office transaction volumes.