But since then the sheer weight of money chasing investment property has driven yields down and a few prime office and retail properties have sold at yields below 4%. This is partly because of increased foreign investors--mainly private--who have been prepared to pay sharp yields because they see London real estate as a haven. But it also reflects pressure on fund managers of insurers and pension funds to increase their weighting in property.
But a number of research reports by consultancies like CB Richard Ellis, Colliers International and DTZ Tie Leung have reported an imbalance between demand and supply. Figures from Investment Property Databank indicate retail yields have fallen from 5.2% to 4.6% and office from 6.4% to 5.3%.The Bank of Scotland property, which is being marketed by Franc Warwick, is investment grade, still has 33 years to run on a 35-year lease and comes with annual uplifts of 2.6% and two rent reviews.
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