Market comment and notable deals

• August saw volumes of £1.12bn over 13 transactions; significant because it represents the highest monthly turnover figure this year (see Graph 1) and the largest August turnover on record, exceeding £1bn for the first time.

• In the biggest deal of the year, and the largest West End sale since August 2013, Blackstone has sold the Adelphi, 1-11 John Adam Street for £550m, reflecting a 4.37% net initial yield and a capital value of £1,679 per sq ft. Since purchasing the property in 2012 for £265m Blackstone completed an extensive refurbishment programme, subsequently attracting a string of well-known names to the building. In addition to the global music streaming service, Spotify, other prominent tenants include Condé Nast, The Economist, A.T Kearney, PetroChina and Finsbury. The interest was acquired by Ponte Gadea, the investment company of Amancio Ortega.

• Off market, Great Portland Estates has sold the freehold interest in 160 Great Portland Street to Alduwaliya for £127.35m, reflecting a 4.08% net initial yield and a capital value of £1,371 per sq ft. The building was comprehensively refurbished over 2011/2012 and provides 92,900 sq ft of office and restaurant accommodation across basement, ground and six upper floors. The offices were pre-let in 2011 to special effects company, Double Negative.

• Savills, on behalf of a private UK investor, has sold the freehold interest in 8-12 Broadwick Street for £14.25m, reflecting a 3.22% net initial yield and a capital value of £1,618 per sq ft. The building comprises offices, retail and a wine bar totalling 8,807 sq ft. The property is fully let with a WAULT of 5.6 years. The West End team have now been involved in approximately £750m of sales over 18 transactions this year and we remain extremely active with a number of sales being prepared for the coming months.

• Whilst there has been much talk of UK institutions becoming more active buyers, we are yet to see this reflected in the statistics. To a large degree their focus remains on disposals as they continue to take advantage of the strong and broad market demand this year. We have recorded almost £1.3bn of sales, compared to just £217m of acquisitions year to date, continuing the trend of disinvestment by UK institutions seen to have started in 2011 (see Graph 2). However with a number of UK institutions having active requirements at present we expect to see a re-balancing of this trend by year end.

• The MSCI average net initial yield moved out to 3.61% whilst the equivalent yield moved out to 4.67%. Savills prime yield remains at 3.25% (see Graph 3).