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German investors funnel £850m into City real estate

City of London
City of London

German investors have ploughed £847m into City of London property so far this year, the second-highest level since 2013, in a boost for post-Brexit Britain.

One in five property transactions in the Square Mile were carried out by German investors in the year to mid-September, according to findings from Savills, the estate agent.

Stephen Down, head of London investment at Savills, said the City had remained attractive in the face of predictions that investment would flounder following the UK's departure from the European Union.

Mr Down said: "The reality is that although some private and institutional investors were deterred from coming to London immediately after the Brexit vote, the City has proved largely resilient and remains a global hub for business."

Investment by German buyers so far this year is 59pc higher than last year, Savills said, and almost double the £287.8m in 2019, before the pandemic hit. Currently, volumes this year are second only to 2017’s total of £1.2bn.

Mr Down said: “There is a disproportionately high amount of money circling globally ready to be invested into core assets and with City offices perceived to be a safe haven for capital they are a top target on investors’ shopping lists.

"German institutions in particular have been able to take advantage of their proximity to and knowledge of the London market, and have come back earlier ahead of some buyers from the Middle East and Asia."

The comments came as estate agent CBRE revealed that central London property investment this year was almost double that achieved in 2020.

Between June and September, £2.5bn was invested in London's market, bringing the total amount of investment to £6.4bn so far this year.

James Beckham, managing director at CBRE, said that while there had been a bounce back in property investment, totals would only increase once Asian investors can freely return and all coronavirus travel restrictions are lifted.