Central London is still the world’s leading destination for commercial real estate investment, with £16.2bn invested last year, according to Knight Frank.
The UK capital beat cities including New York, Paris and Hong Kong to secure the top spot despite investment volumes being down by nearly 4% on 2017.
The average deal size in central London rose to a high of £81.5m.
This investment in central London offices predominantly stemmed from China, which accounted for £3.48bn in 2018 (21%), despite new capital restrictions being imposed. However, this was 51% down on 2017, when Chinese investors spent £7.12bn.
Domestic investment slipped into second place, accounting for £2.75bn (17%) of investment volumes, while South Korea was third, accounting for £2.56bn (16%), an eight-fold increase on the £300m of investment from the country in 2017.
Overall 47% (£7.67bn) of all investment in central London offices in 2018 derived from the Far East.
Nick Braybrook, head of central London capital markets at Knight Frank, said: “Although 2019 presents ongoing challenges, international investors remain undeterred. Our Global Capital Tracker identifies £40bn still targeting London this year, with some seeing the political turbulence and currency weakness as an opportunity, combined with the strong occupational market fundamentals.
William Beardmore-Gray, head of central London at Knight Frank, added: “London has proved its ability to adapt to meet the demands of the modern global economy, and this is evident in London’s office market. Big banks like Deutsche, tech giants like Apple and Facebook and life sciences groups like GSK are the heartbeat of our capital.
“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 submarkets emerging in Nine Elms, Stratford and White City.