London commercial property deals continue to attract investors,
demonstrating that the capital is driving growth across the UK.

Land Securities, owner of the
Walkie Talkie high-rise in The City, due to open next year,
currently has 56 per cent of the building either let or in final
negotiations. The property has benefited from an increased level of
enquiries recently, demonstrating that prime office space is in
high demand.

Other large commercial property firms have seen their activity
in the capital increase in recent months. Property Group, Great
Portland Estates struck two deals in the West End worth a combined
total of £91.5m. The West End is now the most sought-after office
locations in the world, with
more expensive rates than New York and Hong Kong.

High prices in London are seeing surrounding areas benefiting
from increased uptake; take-up of office space in the M4/Thames
Valley corridor has increased over the last 12 months, attracted by
higher yields for office space in prime locations. David Mundy,
Investment Partner at Mellersh & Harding said:

"There has been a spate of M4/Thames Valley purchases of
properties at double figure initial yields where the location is
good and the tenant is strong, however the risk is the short term
income and the high passing rents.

"However, if prime rents are beginning to improve and investor
demand is on the up then these purchases could well prove to have
been astute buys."

High yielding buildings in the Thames Valley include the
disposal by IVG of the Alpha and Beta buildings in Reading town
centre, let to the Prudential, and Axa's disposal of Eton House in
Maidenhead, which reflected an initial yield of 10.5 per cent.

International investment in London is
expected to increase further, with Australian superannuation
funds likely to be the latest high-profile market entrants,
following recent interest from Asian pension funds, according to
global property adviser CBRE.

CBRE says that super funds will find the UK capital's property
market an attractive investment as a result of "transparency,
liquidity, and availability of large quality assets."

"By 2020, Australian superannuation funds will capture an
additional USD $9.7 billion each year, and these funds are already
looking at new destinations in which to invest," said Simon
Barrowcliff, executive director at CBRE.

With the summer months offering incredible views across London,
a number of developers are now converting their roofs into gardens;
enhancing working environments where staff can spend their lunch
break relaxing and enjoying the sunshine.

The new Carmelite Riverside, under construction near Blackfriars
Bridge, has apparently given up nearly £8 million of rentable
space to allow occupants of the building to enjoy panoramic views
of the Thames.

Photograph courtesy of Simon & His
Camera

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