Overseas investment continues to grow in the UK commercial sector


Overseas investment continues to grow in the UK commercial sector

03 Aug 2019

Overseas investment

As per JLL reports, the total investment volume of UK multi-family sector grew over 150 percent to 6.8b Euros in 2018. Overall the EU investment in the multifamily property increased 40 percent in 2018, and the UK capital was the fourth biggest European cities to attract such investment behind Berlin, Paris, and Copenhagen. For some overseas investors, the falling pound continues to provide once in a lifetime opportunity, especially, for those from the Middle East and Africa who had been dreaming to own a bolt hole in the capital city. In the capital, the prices fell almost 4.4 % in the year to May, and this was one of the largest drops since 2009, offering a range of property to the buyers seeking better deals. The reports by ONS state the transaction levels were down as the buyers were trying to negotiate to get higher discounts.

The new UK government is preparing to improve the delivery of homes, which is expected to grow at a rate of 25 percent to meet the targets by 2020. Before the referendum in 2016, the property that was priced over $700,000 is now available at a low price of $600,000 due to exchange rate changes. However, even in the current situation, the top locations of London are not exactly cheap, while, the increase in stamp duty with 3 percent surcharge has increased the overall cost of buying.  Most of the cheaper mortgage lenders have launched deals to attract such buyers and these lenders say they like the building societies, which restricts expats mortgages to British nationals where the UAE based expatriates work for multinational firms.

London Property

Another London-based property investment firm stated the clients from the Middle East are interested in getting property in the country as the yields on real estate have increased and the interest rates are down. The rates are attractive all of a sudden, at the time when the global economies are undergoing a slowdown.

Commercial property

JR capital said they are seeing a rise in investments from Middle East buyers on commercial assets.  The firm’s representatives said they find the multi-let industrial sector undervalued offering opportunities, while, there exists a lack of supply of small to mid-size industrial units in the country, while, the demand for better quality tenants continues to increase. Commercial property and storage can drive the demands and rents, altogether, especially, with the growing trends of online shopping. The value of UK commercial property has been affected by several factors since the Brexit vote (as per JLL), while the investment in the US and Europe has been declining as compared to previous years.

Office take-ups in Edinburg and Glasgow increased in the 2nd quarter of 2019 where key office letting deals were made by JP Morgan and AI firm ARM in the Glasgow city. A similar increase in investments was observed in Edinburg where the total investment reached £200 million. The demand for Grade A investment remains high with robust demand from the tech sector and the public sector.

To find out more about new opportunities in the UK real estate markets, click Hamilton International Estates (www.hamiltoninternationalestates.com).

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