With the commercial property market at a 15-year low, German investors are capitalising on the strong euro and snapping up a number of top office spaces in the Square Mile.
German investment in City of London office space during this boom totals more than £500m to date.
88 Wood Street, a glass fronted office space designed by Richard Rogers and currently owned by ING is going for £180m. German fund SEB jumped in when a deal with a US buyer collapsed, knocking £10m off the original asking price.
German fund manager Signa Deutschland is buying the 200,000 square feet Milton Gate from UBS Asset Management for £150m after it was marketed for £172m in May.
Hammerson is also selling prime office space to German investors, fund managers Deka are buying Moor House for £230m.
The increasing German interest in devalued London office space follows 18 months that have seen the yield on property shift from around 4 to more than 6 percent.
James Beckham, City partner at property consultancy King Sturge, said: ‘Loan-to-value ratios are down, which means buyers require more equity. Most investors can’t compete in this market. It’s leaving the way open for German institutions who like the fact that there is very little competition.’
Tags: Deka, Hammerson, ING, Richard Rogers, SEB, Signa Deutschland