Investing AbroadLondon's West End is offering a bit of winter sunshine for Irish investors struggling through a sleepy January investment market, according to a UK agent. Rents and returns are ahead of most other UK investments and provide an alternative to Continental properties.
This upbeat perspective on the fashionable West End was provided by Simon Beckett, a central London specialist and partner in agent King Sturge. The company is one of the UK's biggest and employs about 2,000 people in Britain and on the Continent, with investment services at the centre of the company's business, says Beckett.
He has been involved in bringing Irish investors to the West End to buy property, and admits the flow of money from Ireland to Britain has slowed somewhat given the slightly higher yield available further east.
He adds, however, that the West End may deliver future performance ahead of any other sector in the UK market, with a combination of "very low availability" combining with strong demand to push up returns.
He describes the January market as "still a bit sleepy from Christmas" as is normal for this time of year.
"However, the signs are very positive," he adds.
He is predicting a "spike" in West End rents well beyond the £100 per sq ft (€152 per sq ft) already achieved at the end of 2006. "We are currently involved in leasing deals which will significantly surpass these levels and within weeks or months rents may be in the £110-£120 per sq ft range for the very best," says Beckett.
"This will result in a ripple effect to areas surrounding the West End's core, such as Soho, where over £60 per sq ft is now being talked of on at least one building."
King Sturge is currently offering an investment property in Soho, 127 Wardour Street, let at a very low rent, £35 per sq ft (€53 per sq ft), which is now worth more like £50 per sq ft (€76 per sq ft) or more, Beckett argues.
The property is let for a further seven-and-a-half years to the Moving Picture Company, which helped make popular films, like Harry Potter and Jurassic Park.
The freehold asset offers strong growth prospects and the company is looking for offers over £20 million (€30.331 million), giving an indicative yield of more than 5 per cent.
