Source: Savills Research
H1 turnover is 9% up on last year, with VP values rising rapidly.
■ June turnover was £0.8 billion across 12 deals, resulting in the year-to-date turnover reaching £5.1 billion, which is 9% up on this point last year.
■ The City 12-month rolling turnover figure is at £12.2 billion, 75% up on the long term average of £6.98 billion.
■ The largest deal of the month was the purchase of 60 London Wall, EC2 by LIM for £197.5 million and £755/sq ft. The building is single let to ING on a lease expiring in September 2016.
click images below to enlarge
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GRAPH 1City turnover annually
■ Another notable deal which completed was the purchase of The Stage, EC2 for £150 million by a Cain Hoy led consortium with Galliard and McCourt Global. The 2.3 acre site in Shoreditch has planning consent for a mixed use development of 250,00 sq ft of offices and 385 homes with 50,000 sq ft of retail.
■ The complexion of buyers has shifted compared to 2014 with the UK investors taking the majority stake of turnover (29%), followed by US (24%) and then Asian investors (21%).
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GRAPH 2Turnover by nationality
Source: Savills Research
■ Whilst stock levels are diminished (only 25 deals openly available) this is not surprising with the time of year with significant sales being prepared for launch in September/October.
■ There has been a significant rise in VP values in the City over the past two years. The capital values for VP properties increased on average by 37% between 2013 and 2014, and have risen a further 28% this year. So far this year, the average capital value for a VP property in the City is £667/sq ft.
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GRAPH 3Average city VP values
Source: Savills Research
■ This is fuelled by a reducing supply pipeline over the next two years, sustained rental growth and more lenders prepared to lend on speculative schemes.
■ IPD average equivalent yield was 5.7% at the end of June, down from 6.3% at this point last year. Furthermore, Savills prime yield has now hardened another 25bps falling to 4%, which is an all time record low.
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TABLE 1Key deals in June 2015
Source: Savills Research