February’s City turnover brings the total investment volume year to date in the market to £377.51m, 52% down on the same point last year (£779.45m). In the West End 2021’s cumulative total now stands at £452m, 43% down on the same point in 2020 (792.00m). Total investment volumes for central London to the end of February therefore stand at £829.51m, compared to £1.47bn at the same point in 2020.

Savills says that most investor interest is currently targeted largely towards assets marketed in 2020, due to vendors’ reluctance to carry out formal marketing processes given practical difficulties in inspecting real estate. This is perhaps unsurprising, given current market conditions, with vendors preferring to avoid openly marketing assets whilst there remains general market uncertainty, and defer until lockdown at least eases. Accordingly, those investors with active buy-side requirements are having to be more proactive in their pursuit of opportunities due to less availability of stock. In the West End in particular, Savills has seen more activity take place off-market than in the open market, with five of the seven February transactions (77% of volume) having taken place ‘under the radar’.

Stephen Down, head of central London investment at Savills, comments: “As the market gains momentum, February’s figures are a positive step in the right direction, and Q1 overall is likely to be further bolstered by several other deals transacted in early March. Buyers are becoming increasingly bullish on the prospect of an economic recovery and London returning to something resembling ‘normality’ sooner than anticipated and ahead of some other European CBD markets where vaccination programmes have got off to a slow start, so are looking towards the city to satisfy their requirements. However, mirroring the recovery pattern seen after other recessions, the focus is on best-in-class assets delivering strong income, mirroring the flight to quality seen in the occupational markets.”