Research released earlier this year highlighted the influx of international investment into London's financial district, indicating that more overseas investors are targeting this part of the capital's real estate industry. According to the Savills European Investment Bulletin looking back at this summer's transactions, the central London office market saw a "high proportion of purchases" among non-domestic investors at the start of 2011. The firm noted that prime assets in particular were popular among those with money to spend on property.
Managing director of Discountletting Daniel Burgess suggested that the strength of London's real estate market compared to elsewhere in Europe is just one of the reasons the British capital attracts so much attention from international property buyers. "UK and overseas investors believe that ultimately, the UK will move back towards growth and will emerge from the bad times. With this in mind, the capital's financial district is an ideal place to invest for UK and overseas investors who have access to adequate funds," he stated.
Mr Burgess added that if this high level of interest continues, it is likely to drive prices in the City higher. Meanwhile, the Savills Central London Office Review and Outlook published this summer pointed to a drop in the supply of Grade A space going into 2012. This could also boost the sector by increasing pre-let activity, the organisation commented, as demand for top locations outweighs available premises. The report also revealed that the City investment market experienced its most successful first half of a year since 2007 in the six months between January and June in 2011.
Savills also noted the majority of investment activity was carried out by international buyers during this period, with those from the US and China the most active groups of overseas investors spending on property in capital's financial district. Meanwhile, spokesperson for the London Chamber of Commerce Iain Smith recently drew attention to some of the reasons why businesses are so keen to be based in the City. He cited the favourable time zone that enables trading with nations in the east and the west of the world, good transport links and access to a strong talent pool for new staff.
- Wednesday 07 December 2011