U.S. Investors Will Return to the Office, but Probably in London

Even as the Omicron strain forces London’s white-collar workers to do their job from home, U.S. investors are eyeing the U.K. capital’s offices. Returns are better than other European hubs, but maybe not for long. North Americans were the biggest purchasers of London offices in the fourth quarter of 2021, accounting for 39% of deals by value overall and 56% within the City of London district, based on data from real-estate firm Knight Frank. Typically, they make around one in five purchases. The numbers may be skewed by the fact that Asian buyers, who usually dominate London deals, face travel restrictions. But higher returns on the city’s offices are also becoming a draw. Average rent yields on the best properties are around 4%, while in Paris and Berlin they are below 3%.