Cash floods into City’s towers

Overseas buyers seeking safe havens for their cash have dramatically swollen London’s share of the UK commercial property market, according to new research.

Deals in the capital – such as the Chinese insurer Ping An’s £260m swoop for the Lloyd’s Building last year – accounted for 40 per cent of the £36.5bn in commercial property transactions in the year to March – up from a 31 per cent share during the recession, according to the City law firm RPC.

The flood of overseas funds has shown no sign of abating since then with the Gherkin skyscraper in the City recently falling to a Brazilian investor for £726m. The Qatar Investment Authority is also close to sealing a £1.1bn deal to buy HSBC’s Canary Wharf headquarters.

The law firm’s head of real estate, Martin Barrett, said: “Overseas funds are taking a risk-off approach – they consider the high occupancy rates and better liquidity of the prime London market more attractive than the higher yields achievable outside of London.”