Buyers swoop in record spree on London retail property

Overseas buyers are set to fuel a record £2 billion-plus shopping spree on London retail property this year, despite the impact of the Brexit vote, industry experts have said.

Buyers have spent £1 billion on central London retail in the first half of the year, outstripping the £700 million first-half average of recent years, according to agents CBRE. In August alone a further £450 million in property is set to be sold, it adds.

Among the biggest retail properties changing hands in central London this year, in the teeth of uncertainty over the UK’s status in the European Union, include the sale of Oxford Street’s Debenhams to Stefan Persson, the billionaire chairman of high street fashion chain H&M, for £400 million.

Hong Kong tycoon Joseph Lau splashed £183 million on Zara’s new store at the east end of Oxford Street, while Sports Direct billionaire Mike Ashley also got into the action, spending £108 million on 167 Oxford Street to act as a new corporate headquarters as well as a first flagship store for its luxury online fashion brand Flannels.

CBRE’s head of UK retail Phil Cann said between £1.6 billion and £2 billion of retail property usually changes hands in central London every year.

He said: “I think there is every chance [of a record] this year. Given the amount of bidding activity we have seen, there is still a significant amount of equity tracking London retail and it shows that buyers are still very happy with the London story.”

Hong Kong and Singaporean buyers are particularly active in the current market, Cann added.

Overseas investors represented almost two thirds of trading volumes in the first half of the year, a trend set to continue given the fall in sterling since Brexit, making London assets even more attractive.

The same trend is boosting the spending power of overseas visitors, again heightening the appeal of hot spots like Oxford Street.