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31 July 2012

London remains a safe haven for overseas investors

Andrew Cruickshank, International Investment Director at BNP Paribas Real Estate shares his views on the London commercial property investment market.

“London has always been perceived as a safe location for overseas investors – a fact that our latest research has proven to still be true, as more than £6 billion has been invested into Central London offices since the start of the year.

Over the decades, we have seen specific countries dominating the London investment market, but this has now changed, with investment coming from a range of countries and regions, especially those with growing middle classes or a large amount of high net worth individuals.

Since the start of 2012, 71% of investment within the overall Central London market came from overseas investors, with North America, Middle East and Germany proving the most active regions. Within the City, 85% of investment came from overseas investors, with the North Americans, South Americans and Germans proving to be the most active in this market. In addition, 61% of investment into the West End market came from overseas – the top investors have been from North America, Germany and other European locations.

In terms of preference, the focus on specific Central London sub-regions has been diluted, as investors look at London as a whole, searching for buildings that can provide strong returns and can secure attractive covenants. In terms of the future pipeline, although several large and high profile tower blocks are in construction, much of the space has been pre-let, so demand still exists for the right type of space.

Looking forward, as the European economy continues to face some unprecedented challenges and the Middle East remains unsettled, London will retain its position as a resilient market – attracting overseas investors.”

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