Q3 South East Office Market Snapshot

By October 2018 Insight
  • As predicted in our Q2 newsletter, Q3 has been a bumper quarter with over £1 billion of transactions taking place, representing a Q-on-Q increase of 85% and a 16% premium over the 5-year average for Q3 transaction volumes
  • The Local Authorities continue to be extremely active, representing 39% of transaction volumes, led by Spelthorne Borough Council’s acquisition of Thames Tower, The Porter Building and The Charter Building for a combined price of £285 million. There were a number of institutional buyers who were disappointed to miss out, in particular for Thames Tower and The Porter Building.
  • The Local Authorities have been the dominant buyer base for any long-medium term income assets but are increasingly focussing on properties “in borough” or in neighbouring economic areas under guidance from Central Government
  • Overseas investors represented 17% of the transaction volumes by undertaking a few larger lot size deals. These were Valesco Group and AIP’s acquisition of the Microsoft HQ at Thames Valley Park for £100,000,000, EPIC’s acquisition of Pinnacle in Wimbledon for £40,210,000 and Dimah Capital’s acquisition of 4, The Square on Stockley Park for £34,500,000.
  • For the institutional funds it was a subdued quarter except for M&G who succeeded in acquiring both Tor in Maidenhead for £35,000,000 and Strata in Staines for £46,500,000.
  • Private equity buying activity was limited except for ARES acquisition of the Equinox Portfolio from AEW