Source: Savills Research
2018 Q1 turnover set to be in line with the long-term average
Market comment and notable deals
■ February turnover was £220.8m across eight transactions, with an average lot size of £27.6m, bringing total turnover to £664.2m across 14 transactions. This is 8% down on this point last year, however, with a number of sales set to exchange before Q1 2018 ends, we expect turnover levels to be broadly in line with the long-term average Q1 figure of £1.54bn.
![Graph 1](http://research.euro.savills.co.uk/_images/graph1(250).png)
GRAPH 12017 vs 2018 activity levels
■ Asian investors have continued to be active in the first two months of the year, accounting for 46% of investment turnover to date, with UK investors close behind (42%). While there has been no activity from European or Middle Eastern investors yet, US investors have accounted for 9%, with the remaining 3% coming from other nationalities.
![Graph 2](http://research.euro.savills.co.uk/_images/graph2(244).png)
GRAPH 2City 2018 turnover by nationality
Source: Savills Research
■ The Bank of China acquired 60 Gresham Street, EC2 for £70.75m, reflecting a net initial of 4.07% and a capital value of £1,161 per sq ft. The long leasehold building occupies a prominent corner position on Gresham Street, 75 metres from the Bank of England. Developed in 2008, the property is fully let to seven office tenants and one retail tenant with a WAULT of 8.5 years to expiries and 6.2 years to breaks.
■ US data centre investor Digital Realty acquired Lawn House Close, E14 a multi-storey car park adjacent to the company’s Sovereign House data centre for £22.0m, reflecting a net initial yield of 3.39% and a capital value of £167 per sq ft. The car park occupies a 0.51 acre freehold island site, and is multi-let to four tenants at a passing rent of £795,727 per annum, which reflects a rent of £6.05 per sq ft overall. All leases benefit from RPI linked review provisions.
■ Whilst turnover is marginally down on this point last year it is likely that activity will begin to pick up as some of the larger assets currently under-offer complete. Despite there currently being 11 less properties on the market when compared to this point last year, the value today is 82% higher than that of a year ago. Interestingly, 58% of all assets currently being marketed are believed to be under offer totalling £3.3bn, 26% higher than this point last year when only £2.6bn was under-offer.
■ Savills prime City yield remains at 4.00% for the thirteenth consecutive month, this compares with the West End prime yield of 3.25%.
![Graph 3](http://research.euro.savills.co.uk/_images/graph3(157).png)
GRAPH 3City & West End prime yields
Source: Savills Research
![Table 1](http://research.euro.savills.co.uk/_images/table1(227).png)
TABLE 1Key deals in February 2018
Source: Savills Research