Whether it’s commercial or residential, London’s popularity with overseas investors is clearly visible
The capital is ranked the number one destination in the world for commercial cross-border investment. Of the £15bn transacted in
the commercial market in central London last year, 65% was by non-domestic investors, with Asian buyers
dominating the City market, accounting for £2.3bn, and European investors taking the lead in the West End with £1.5bn. Similarly, in the super-prime end of the
residential market, sales of new-build homes valued at more than £5m were boosted by ultra- wealthy overseas buyers and, for the first time since 2006, exceeded 50 transactions during the year – a total value of more than £600m. It seems that even the shock of increased
taxation announced in the 2012 spring Budget did not dent the prime residential sector, with buyer confidence absorbing much of the impact and 2012 seeing just over 400 sales (of £5m-plus homes) in London with a total market value of more than £4.1bn.
London’s private rented sector is also going
from strength to strength, with a dramatic increase in demand from both private and institutional investors. All the signs for the London real estate market during 2013 indicate that it will remain strong and retain its continued appeal for overseas buyers. For the commercial market in particular, most non-domestic investors will continue to focus on prime core assets. However, a scarcity of product, combined with
an improvement in wider business confidence as well as upward pressure on rents, may encourage some buyers to move up the risk curve and embrace more fringe locations or compromise on income security. And, with UK property companies still hunting opportunistic deals, we could see some interesting competition for assets in the central London market this year.
Mark Ridley, chairman and chief executive, Savills UK
All the signs for the London real estate market during 2013 indicate that it will retain its appeal for overseas buyers