They have bought £690 million of such buildings over the past 12 months, usually with plans to refurbish. Investors from Europe have led the activity, accounting for 48% of all transactions, followed by UK investors (14.4%).
Transactions include Lion Plaza in Old Broad Street, the headquarters of law firm White & Case, bought by a south-east Asian private investor for a reported £260 million.
Pontegadea, the investment vehicle of Spanish Zara founder Amancio Ortega, snapped up a former BBC office building at 33 Foley Street in Fitzrovia for £82 million. This summer also saw the family behind Manolo Blahnik acquire Mayfair’s 31 Old Burlington Street building for £35 million.
Nick Braybrook, head of London capital markets at Knight Frank, said ultra-high net worth investors often fund purchases without taking on debt, leaving them less affected by rising interest rates.
He said: “Acquisitions by ultra-high net worth investors reflect their ability to capitalise on reduced prices while also, in many cases, benefiting from a significant currency advantage against a weaker pound.
“Often, they can fund purchases without taking on debt, putting them in a strong position against institutional buyers, being nimbler in completing transactions.”