Overseas investors‘ interest in the commercial properties located in central London continue apace as Korean, Chinese and Malaysian investors look to the prime trophy market in order to snag a prestigious piece of real estate.

More than £2 billion-worth of transactions were completed during the past month, a figure that would appear to indicate that the commercial property market in central London has retained both its resilience during tougher economic times as well as its perennial attraction to foreign buyers and investors.

According to Stephen Down, who is the managing partner at specialist central London-based investment consultancy, Gresham Down Capital Partners, the recent trend has abated fears of excess market stock dampening market appeal.

‘Five weeks ago the fear was that there was too much stock on the market but the appetite of buyers has been voracious,’ he commented.

The American opportunity fund, Carlyle, has recently acquired six office buildings in London, including the White Tower portfolio. They made the acquisition from official receivers at a cost of more than £670 million.

Stephen Down’s company has, itself, recently advised a private investor from Eastern Europe who has recently bought Mitsubishi Estate Company’s Bow Bells House, which is a prime city asset. The property was acquired for £140 million. Down commented that, as a result of the current paucity of debt, the majority of recent buyers have been largely equity rich.

City of London office rentals have climbed by nearly 12% during the past three months, and by 24% over the past half year. Construction starts have been particularly hard hit in the City, and has led to tenants landed into bidding wars over the scarce supply of Grade A property space. The end result of this is that rents are driven upwards.

Mr Downs also commented that there is more and more evidence that Korea, Chinese and Malaysian investors are entering the prime London market.

 ‘Chinese entrepreneur Joseph Lau has been reported at the preferred bidder on the £300 million Tower 42 but we know there are a number of other Far Eastern institutions and private investors that have targeted London because of the liquidity and transparency of the market but also because of the weakness of sterling,’ Mr Downs commented.