US fund spends £146m in London

A LEADING US property fund has bought a £146m portfolio of central London properties, demonstrating that despite the economic slowdown overseas interest in the capital's commercial properties still remains strong.

American-owned Peabody Global Real Estate Partners and Peabody International Real Estate has made the biggest purchase in central London properties this year, a mixture of long-term investment properties and some with short term development opportunities.

They have also been granted the right to be considered first for a further West End development site.

Among the nine properties sold are premises in Wardour Street, home of the film industry, Victoria Street, famous for its Army & Navy store, Savile Row, renowned for bespoke tailoring, The Strand, where The Savoy is, and Lime Street near Liverpool Street station where Lloyd's stands. In Percy Street, off Tottenham Court Road, a block of 18 properties and two mews has been purchased.

The properties have been sold by Security Capital European Realty, which owns properties across Europe. Surveys have shown that those in London, in particular in the West End, City and central areas, are among the most wanted and expensive.

Patrick Despard's City & West End Group has been appointed by Peabody to provide it with asset management services. Funding for the US acquisition was provided by Morgan Stanley and Depfa.

The massive US vote of confidence in London commercial property comes at a time when research conducted by Jones Lang LaSalle Leisure Services predicts that in order for leisure development to succeed it will have to be 'more subtle and sophisticated'.

JLLS's 'Leisure 2010-Experience Tomorrow' report predicts that as leisure spending continues to outpace other consumer goods in an increasingly cash rich/time poor society, leisure is seen more and more as an essential catalyst to generating other commercial activity.

The report says that consumer trends in leisure 'will be a major kinetic force for business success in many sectors in the coming decade.'

The changing face of leisure spending was illustrated yesterday when Whitbread decided to sell off its poorly-performing CafÈ Rouge and Bella Pasta restaurants. Leisure analysts have been saying for some time that these brands are too old-fashioned.