December transactions accounted for 30% of the West End’s total annual turnover by volume, and 19% by the number of transactions.

Whilst an eventful December is by no means unusual, the extent to which it dominated the year is unprecedented and can be attributed to a myriad of factors, in addition to the traditional year-end pressures.

On a macro level, these included the economic and political certainty brought by a Conservative majority – and the subsequent emergence of relative clarity regarding Brexit. On a market level, the sheer lack of any material activity throughout the rest of the year, coupled with the closure of two massive December deals (which accounted for 56% of the monthly volume) should not be ignored.

The most significant of these was Ponte Gadea’s acquisition of The Post Building, Covent Garden, from Oxford Properties & Brockton for £607.5m, which reflects a net initial yield of 3.95% and a capital value per sq ft of £2,011 – a record for the micro-location. The AHMM-designed building, which completed in May 2019, is majority let to McKinsey & Company, Rothesay Life plc and Nationwide Building Society at an average rent of £87 psf, for a weighted unexpired term certain of over 14.9 years.

December volumes were also boosted by Cording Real Estate and Tristan Capital Partners’ £245m acquisition of Teddy Sagi’s 2.5 acres Holborn Links Estate, K&K’s acquisition of Orion House from WELPUT for £130m and a confidential Savills disposal in excess of £100m.

December’s activity brought total annual turnover in the West End to £5.14bn across 98 transactions – 36% below the previous five years’ average by volume, and 46% by number of transactions. The lack of liquidity manifested itself most starkly in the £100m+ category, where we witnessed only 11 transactions – approximately half the number seen in both 2018 and 2017.

It is important to note that the diminished activity stemmed more from a lack of liquidity and stock than a lack of purchaser appetite, but the scale of uplift seen in December and weight of live investor requirements bode well for a more active 2020, notwithstanding enduring geopolitical headwinds.

Across 2019 as a whole, domestic buyers retained their long-term status as the West End’s largest investor group, accounting for 47% of turnover by volume, and 57% by number of transactions.

For the second consecutive year, European investors accounted for a larger share of annual turnover than Asian investors, accounting for 26% by volume and 17% by number of transactions. Asian investors’ figures were relatively muted, however, at 13% in both categories.

Savills acted on one in every five West End transactions in 2019 (22% by volume) and advised on more sales than any other agents. This represents another strong year for the team, whose market share versus other advisors rose to 25% by volume, and 24% by number of deals.

The MSCI average net initial and equivalent yields moved to 3.40% and 4.79%, respectively. Savills prime West End yield stands at 3.50%.