Norway Wealth Fund Invests in UK Properties

Norway Wealth Fund 

Norway's wealth fund, with resources greater than $1 trillion of Norway's oil and gas, announced to increase its stakes in the UK real estate, with the view of 30 years growth plan. The fund is one of the biggest in the world and will be purchasing nearly 200 UK properties. It had previously funded US and Japan real estate projects and other assets.

Foreign financing has also increased in the student accommodation sector, where buyers from Qatar and Singapore paid for some of the key Plymouth student apartments. As a result, some of the property is highly attractive now, as they are offered at a 20 per cent discount compared to a few years back.

Qatar invested £ 3 billion in the UK markets and is expected to spend £2 billion more in the coming months. Some of the highest average returns have been reported in Plymouth (7.24 per cent), Leeds (6.57 per cent), Liverpool (6.23 per cent) and Sheffield (6.24 per cent), as per Yieldit's data.

The Significance of Overseas Ventures in the UK

Many countries are investing in official and residential opportunities in the UK, identical to Malaysia, South Africa, Israel, China, and Spain. In a speech in Parliament, Mr Alex Brazier of the Bank of England said: "The economy has become reliant on the commercial real estate sector, where 60 per cent of the overseas capital inflow came into the commercial sector and leveraged loans."

The sector is still getting a significant percentage of such investments, and the government must support it. The country has one of the highest current accounts deficits that require such investments to sustain the sector. 

Commercial and Industrial Properties

The retail sector is highly vulnerable to Brexit, with many reports of weakness. However, the FCA is interested in it because the last time outflows were reported, the investors could not get their capital out for a short duration.

The RICS and Ulster Bank Commercial market overview of Northern Ireland shows the interest for business property expanded in the last quarter of the year. Over the most recent three years, the workplace division picked up fundamentally with developing mechanical requests.

CBRE's Prime Rent and Yield Monitor show the rentals in the commercial market increased by 0.1 per cent in Q4, 2018, one of the lowest quarterly growths since Q3, 2012.

However, the industrial sector's performance helped increase prime rents by 1.7 per cent in Q4, where overall, the rental growth in 2018 was 8 per cent. In terms of the industrial sector London, Eastern markets, and the South-East performed strongly, where the growth was 2.2%, 2.3%, and 2.1%. 

Savills industrial asset reports show 17.2 per cent returns in the last 12 months, where deal volumes in the commercial sector declined 5.7 per cent y-o-y in 2018, to £62.1 billion. In the UK, Alternative and mixed-use properties accounted for 29 per cent of last year's purchases.

There are uncertainties in the economy and the real estate markets, but some regions are active, like Northern Ireland, where the total investment in property made in 2018 was £177m. Nevertheless, it is less than the five-year average of £330 million.

To know more about UK properties, click Hamilton International Estates (www.hamiltoninternationalestates.com).