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Central and fringe London 'most attractive to investors'

Commercial real estate investors are continuing to focus on central and fringe London areas at present, with this situation predicted to continue into the new year.

Michael Keogh, senior investment and economic analyst at Henderson Global Investors, told attendees of last week's Property Week webinar that the majority of investment types will more than likely continue to undergo some kind of capital adjustment in 2013, but for the time being the London market remains stable.

He commented: "We need to remember that the period from 2003 to 2007 was an aberration and, quite frankly, we are in year two or three of what could be a five or ten-year recovery in some areas of the market."

Mr Keogh added that fringe markets are offering a number of attractive valuations at present and this, in turn, could bring about greater interest in these areas from overseas investors, while central London remains one of the only areas where short-term rental growth is forecast.

Likely winners in terms of value gains in the near-term include central London offices, as well as quality retail establishments that can weather the turbulent conditions that are being witnessed at present.

Mr Keogh's comments follow the recent launch of CBRE's new Real Green Research Challenge - a four-year, $1 million (£620,000) commitment to fund leading-edge sustainability research and innovation relating to commercial real estate.

Meanwhile, director at Prickett & Ellis Nigel Ellis recently argued confidence in the central London property sector is now spreading to other areas of the capital.

He claimed: "Sales prices are as high as they have ever been, if not higher. The confidence generated by all of the press about the boom in central London is having an effect.

"It is certainly not deterring anyone and I think that does have an effect on the less valuable areas." 

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