Germans buy £500m worth of property in Square Mile

German investment funds have taken advantage of the plummeting value of the pound to buy up £500million of property in the City of London.

As the commercial property market in London faces its worst conditions in 15 years, the German institutions have used the soaring strength of the euro and a lack of competition caused by the credit crunch to purchase a string of high-profile buildings in the Square Mile.

They include 88 Wood Street, the glass-fronted offices designed by Lord Rogers, which ING is to sell to German fund SEB for £180 million. It got £10million knocked off the asking price after a deal with an American buyer collapsed.

UBS Asset Management is selling Milton Gate in Moor Lane to German fund Signa for £150million, while Hammerson is selling the Foster and Partnersdesigned Moor House at London Wall to Deka for £230million.

Analysts said profits for investors were up after 18 months of falling prices, with rents stable, but buyers needed more equity as loans are harder to get.

James Beckham, City partner at property consultancy King Sturge, said: "Most investors can't compete in this market. It's leaving the way open for German institutions who like the fact that there is very little competition."