The demand for London’s development land continues to remain high in 2017 with transactions during the second quarter of the year reaching £722m. This indicates that London still maintains its edge over the rest of the global real estate hotspots.
Data released by international real estate adviser CBRE showed that it was the strongest quarter for development land transactions in London since the EU referendum (mid 2016). The transactions during the second quarter increased by 48 per cent over the first quarter of 2017, and it meant that more number of developers are acquiring land.
According to CBRE, overseas buyers were responsible for the uplift in transactions of development land. They accounted for 83 per cent of the buyers with their targets being large lot sizes for mixed use development. In fact, there were three land deals over £100m during the second quarter.
CBRE has an interesting observation on this topic, “Political uncertainty slowed development land sales during 2016 but the rebound in activity during H1 2017 demonstrates the re-emerging appetite for development land in the capital.”
Many developers are actively scouting for development land for mixed use with the demand for quality housing increasing simultaneously. CBRE expects more transactions and predicts sale of £1.5bn of land by end of the year. The year 2017 could be a good year for development land in London.
Looking ahead, the sales pipeline remains strong, with £1.5bn of land expected to complete before the end of the year, with almost all land intended for mixed-use development.