In 2012, foreign capital dominated the London office investment market.

Despite continued economic uncertainty across the Eurozone, foreign investment into London's office market remains strong, according to Jones Lang LaSalle, with the only constraint being a lack of stock in the West End. property for sale in qatar

London office spending totaled £6 billion in the first six months of 2012. Overseas capital accounted for more than 75% of operation, with Asian capital accounting for 27%. Total volumes in the first half of 2012 rose 8% over the same timeframe last year, and a further £10 billion is currently being targeted for the industry, with year-end volumes expected to hit £12 billion, up 11% from 2011.

Jones Lang LaSalle's Head of London Capital Markets, Damian Corbett, tells World Property Channel, "The demand in the West End appears to be characterized by a lack of availability. Strong competition for core assets keeps prices stable, and demand for high quality, well-let assets as well as short-term asset management opportunities continues to increase. A yield differential between prime and secondary stock is currently affecting the City market, with a flight to quality placing more downward pressure on yields. However, as the Eurozone banking and currency crisis spreads, investors are injecting more risk into their pricing, the discount on secondary products is widening."

Active demand in the leasing sector is still fairly limited. However, more potential future occupiers are beginning to appear, and total recorded demand is now 6% higher than a year ago, which bodes well for when the macroeconomic situation improves. Although actual take-up remains below average, with increased potential demand and a dwindling supply pipeline, occupiers who wish to relocate face an increasingly difficult choice: act earlier than desired to secure quality space at affordable rents in the best locations, or be confronted with increasingly restricted options at higher rents.

Jones Lang LaSalle's Head of Office Agency, Neil Prime, says, "Inevitably, the increase in unmet occupier demand in London will begin to outweigh supply levels. The main question is when this demand will become active. We are beginning to see early signs of such activity, with occupiers recognizing the lack of future supply and committing to secure their future occupational needs. However, such activity is currently sector specific, especially in the insurance and technology sectors."

Prime continued by saying, "As the quest for quality and value picks up steam, occupants are transitioning from the West End to locations that provide a high-quality office commodity at lower overall occupational costs. Our prime Grade A markets are getting closer to a tipping point with each transaction on grade A space. When this occurs, we will see a rapid increase in rental growth and a decrease of choice, posing a dilemma for occupiers: the supply and value choices available today in a time of economic instability versus higher prices and a lack of choice as the economic cycle improves, posing a conundrum for occupiers."

Other significant results include:

Prime rents in the City have remained unchanged for the past six quarters at £55.00 per square foot. The new prime rent in the West End is £95.00 per sq ft, and there has been no change for four quarters.

Preliminary H1 take-up volumes for the City were 1.5 million square feet, up 7% from the same period last year, while 1.2 million square feet was let in the West End, down 14% from the same period last year.

Jones Lang LaSalle expects prime rental growth of up to 8.9% in the West End and 9.6% in the City by the end of 2013, as supply tightens and demand strengthens over the next 24 months.

The West End's Grade A vacancy rate rose from 2.1 percent to 2.4 percent, while the City's rate rose from 4.4 percent to 4.7 percent.

The City's preliminary H1 investment volumes totaled £4.08 billion, up 14 percent from H1 2011, while the West End's totaled £1.90 billion, down 18 percent from H1 2011.

The West End has a prime yield of 4%, while the City has a prime yield of 5.25 percent.

German and Middle Eastern investors returned to the market in large numbers in H1 2012, accounting for 18% and 14% of total investment volumes, respectively./tokyo-has-been-named-best-residential.html

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