CBRE has reported 60% spike in sales in Q3 this year compared to last in Midtown – twixt Mayfair and the City – as buyers look beyond Mayfair and Knightsbridge.
The agency has done £63m-worth of transactions in the last three months, and £148m in the year to date.
“Sales this quarter were again strengthened by the increasing trend from buyers extending their search from Mayfair and Knightsbridge into Covent Garden and Soho,” notes the firm. Domestic UK buyers dominate the Midtown patch, accounting for 60% of total sales in the last quarter; European buyers were behind 10% of deals; Asian buyers, 7%.
Jamie Gunning, Senior Director at CBRE: “CBRE continues to recognise that the increase in high-quality development is resulting in prospective buyers broadening their nets from the traditional ‘golden postcodes’ such as Mayfair and Knightsbridge, and now actively looking to include Covent Garden and Soho too.
“With the current major investment in Crossrail and underground improvements, the profile of Midtown is continuing to rise considerably. No longer are Midtown’s visitors coming to this world-famous pocket of London to just eat, drink and enjoy the cultural offering – but also to live in the area as well.
“This Quarter has seen an increase in the amount of new build and resale stock available in the area, which remains to be good news for today’s buyers. Through combining a prime offering with this central London location, we continue to foresee Midtown breaking average sales value of £2,000 psf by this time next year.”
Here are few nuggets from CBRE’s Q3 Midtown Report:
- £2m+ properties made up over 30% of sales this quarter
- Average £psf values increased by 2% over the quarter to £1,780, bringing annual growth to 19%
- Q3 is a “traditionally volatile” time for the resi market
- Sales were split 60/40 between new build and resale units
- In the new build market, CBRE transacted £44m-worth of property at an average of £1,898 psf (+2% on the quarter and +8% from Q3 2013)
- The resale market accounted for £19m-worth of deals at an average sales value of £1,518 psf (+2% on the quarter and the highest average £psf value so far achieved in CBRE’s resale market)
- “Those working in the finance sector didn’t dominate, and instead a quarter of sales were to those working in the property and construction industry. Arts and Entertainment professionals accounted for a further 20%, with finance workers accounting for only 10% of sales.”
- CBRE agreed 123 tenancies in Q3, 60% of which were for the student market
- The total value of tenancies equated to just under £75,000 per week
- Average rents increased by 3% over the year to £613 per week
- The average £psf rental value in Q3 was £52 compared with £48 for the same period last year
- Refurbished properties achieved double the rental value growth of non-refurbs; across all refurbished properties CBRE saw an average value of £53 psf this quarter, compared to £48 for non-refurbished units. On average the agency has seen a 9% premium in £psf values for refurbished units versus non-refurbished since the beginning of 2013
Have a read of the full report here.