CBRE says that overseas investor activity in the London commercial market has increased year on year since 1999 and that foreign investors have collectively spent £144.3bn over this period.
CBRE’s market data also gives an insight into the origins of this investment, and how this has evolved over the last two decades. It says that in the 1999-2003 period £11.6bn was invested with German investors being the largest single force. In 2004-2008 £34.2bn was invested with US investors proving dominant. Over 2009-2013 £42bn was invested with Middle Eastern investors the single most active group.
It adds that during the 2014-2018 (3Q) period £56.5bn was invested. However, during this period investors from the Asia Pacific region have been the largest single source of investment by far, being behind 28% of all deals.
The report says that Brexit uncertainty is unlikely to slow foreign investor interest due to the dominance of the UK capital. James Beckham, Executive Director and Head of London Investment Properties at CBRE comments: “Brexit isn’t likely to have a material impact on the appetite to invest in Europe’s only truly global gateway city.”
Few people will be surprised at the scale of foreign investor interest in the London commercial market. However, the source of this investment perhaps offers a surprising insight: It could suggest that in recent years prudent investors from nations with relatively conservative-minded investment strategies have been displaced by investors from the world’s emerging nations who are less risk-averse.