Britain’s most famous Shopping Streets see dramatic rise in international ownership

UK funds, British and Irish pension funds, who accounted for 96% of ownership on Oxford Street, have reduced their collective stake to 39% having been bought out by investors from Denmark, Spain, Cyprus, Qatar, Libya, Ukraine, India, Hong Kong, Sweden, Canada and the Far East. Similarly Savills reports that five years ago 86% Bond Street landlords were British and Irish investors compared to only 31% today. These stores have been acquired by Denmark, France, Russia, Italy, Thailand, Singapore, China and the Middle East.

Jonathan O’Regan of Savills’ Central London investment team says: “Investors are attracted by cheap sterling and London’s reputation as a safe haven. A lot of UK funds and Irish investors have sold out because they can see the market is very strong and the properties have sold for cash at far in excess of the purchase price.”

Savills has recently sold 138 New Bond Street, London and 40-41 Old Bond Street, London to private investors on behalf of British Airways Pension Fund for a combined lot size of £28.125 million. The properties achieved initial yields of 3.08% and 2.74% respectively.

Anthony Selwyn of Savills Central London retail team adds: “We have seen some tenants acting as buyers themselves. This gives them a continued presence on the street and insulates them from rental increases which are forecast to rise further.”

Savills research shows rents have grown by an average of 50% on the two streets over the past five years, but by up to 90 per cent in some areas of Bond Street. Strong sales during the down turn have seen figures continue to rise by up to 3.4% year on year.