Private equity firms and sovereign wealth funds are spearheading a dramatic rebound in London\u2019s retail property market, with Savills forecasting over \u00a32bn ($2.7bn) in investment across central London in 2025, the highest level since 2018,<\/b>\u00a0according to\u00a0<\/b>Bloomberg\u00a0sources.<\/b><\/p>\n
This resurgence has been most prominent in the West End, which accounted for \u00a3495m of the total in the first half of the year, marking a 19% year-on-year rise. The area\u2019s appeal is strengthening due to long lease structures, low capital expenditure requirements, and a favourable debt environment.<\/p>\n
\u201cWe\u2019re seeing a marked resurgence in investor appetite for Central London retail, particularly in the West End,\u201d said Charlie Stoneham, associate director of central London investment at Savills.<\/p>\n
The return of footfall and international tourism is being bolstered by plans to regenerate Oxford Street, including a proposed pedestrianisation initiative led by London Mayor Sadiq Khan. A recent public consultation found that 70% of respondents supported the regeneration, with two-thirds backing full pedestrianisation.<\/p>\n
The favourable conditions have already translated into key transactions, including Royal London Asset Management\u2019s \u00a363m sale of a mixed-use property at 149-151 Oxford Street. That deal marks the first owner-occupier acquisition on Oxford Street since Ikea\u2019s investment arm acquired the former Topshop flagship store for \u00a3378m in 2021.<\/p>\n
Marie Hickey, director of commercial research at Savills, noted that pedestrianisation is directly encouraging deal activity.<\/p>\n
With the West End bouncing back post-pandemic and retail vacancies declining, investors are capitalising on the opportunity to secure prime assets in one of the world\u2019s most iconic shopping destinations. Several additional acquisitions are expected to close in the second half of the year.<\/p>\n