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In the UK: Local overtakes foreign investment for the first time in two years

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UK investors injected more capital into the Central London office property market than their overseas counterparts for the first time in two years. 

Global real estate consultancy CBRE suggests there were transactions worth GBP3.1 billion in the first quarter of this year alone. This is a rise of 6 per cent from the same time last year, when the investment totaled GBP2.9 billion. 

UK investors invested GBP1.6 billion representing 51 per cent of the total.

This is the first time local investors have caught up to non-UK property developers since the third quarter of 2013.

The overseas spend on the Central London properties was lead by North American and Asian investors who acquired properties worth GBP641 million and GBP443 million respectively.  

CBRE's research suggests Asian investors have always been strong in the market for. However, the previous two years were the strongest attracting GBP10 billion from Asia - the highest amount in the past 25 years. 

Executive Director, Central London Capital Markets Simon Barrowcliff says Asian investors are looking towards London because of several reason such as deregulation in some key markets while the tightening of conditions in others, encouraging property developers to look for better returns in London and elsewhere.

"The Central London rental growth story remains a compelling opportunity for both domestic and overseas property investors. For the first time in over 18 months we have seen transactions backed by UK money overtake deals supported by overseas investors, which perhaps indicates the optimism that exists domestically in relation to that growth. UK investors accounted for only 31 per cent (GBP5.8 billion) of all transactions in the whole of 2014," he added. 

Date Published: 05 May 2015
Category: General NewsUK

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