For the first time in nine years European investors have surpassed their counterparts from Asia Pacific to become the most active in London’s commercial property market.

“Faced with growing pressure to rebalance their portfolios, European institutional investors are showing renewed interest in London,” Oliver Bamber, director in the central London investment team at Savills, said.

“A constricted office market and conservative development pipeline looks attractive, and prime yields on city centre office assets (circa 4%) offer a considerable discount to similar assets in Frankfurt, Munich and Paris (circa 2-3%).

“Moreover, the Covid-19 pandemic has acted as a leveller across many aspects of the property investment landscape, and Brexit is no longer viewed as the greatest threat to income security.”

European investment accounted for £1.17bn (39%) of the £2.9bn invested in London’s commercial real estate, compared with £428m (14%) from Asian investors in the first half of 2020. Domestic investors spent just over £1bn, accounting for 33% of all activity, research from Savills reports.

Notable transactions included Union Investment acquiring the 50% of Watermark Place, EC4 that it did not own from Oxford Properties, and the £48.5m acquisition of 90 Bartholomew Close, EC1 from Helical by La Francaise Real Estate Partners International.