The UK’s capital city is No. 1 again for overseas commercial property investment.
A looming Brexit has not impacted the appeal of owning commercial property in London, with the city regaining its top spot as the number one destination for international investors.
More investment came into the UK capital than Paris, Manhattan, Munich and Frankfurt combined. Foreign buyers led by Hong Kong billionaires and Korean securities firms, combined with a wave of money leaving Asia in search of a home, has cemented London as the top city for real estate investment from overseas.
In addition to this, more than a fifth of real estate investors from the GCC say the UK is their preferred destination for international investment, and almost half (49 per cent) aim to commit funds to a London property in 2018, according to a survey by Cluttons.
“London office prime yields can seem good value to overseas investors,” said William Matthews, head of capital markets research at broker Knight Frank LLP, which provided the data. “Particularly given the prospects of some rental growth and the recent movements in sterling.”
Overseas investors spent 5.6 billion pounds ($7.2 billion) on London offices in the six months through June, according to Knight Frank. Sustained demand for office space in the city and a relative scarcity of supply has reassured buyers with their investment. A strong employment market in the captial, a swell in leasing by flexible-office operators, and anxious developers postponing new construction have all contributed to this influx of investment.
Overall, this is a positive sign for the commercial property market in London in the face of Brexit, as it doesn’t appear to be slowing down.