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Impact Investing

IPE special report May 2018

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Foreign investment in UK property doubles

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UK – Foreign investment in British commercial property reached a record high in 2000, doubling the figure for 1999 at a total of £7.1bn (e11.1bn), says a report by DTZ Research. In real terms it is an increase of 50% on the previous record in 1989.

US investors accounted for almost half the total international property purchases in the UK last year, with investors from thirteen other countries investing “significantly,” according to the report. Australian, Irish, German, Dutch and Israeli investors were among the main investors last year, although the Germans, Japanese and Swedes were net sellers.

“This year has kicked off similarly to last year. There are a lot of people contemplating and thinking about strategy, but the Americans still appear to be keen to buy in Britain. If the US economy is at the top or has passed the top of the cycle and has gone ex-growth, prudent investors are likely to be looking to European economies for growth,” says Michael Cutteridge, head of UK investment at DTZ.

The report stresses that acquisitions by these countries accounted for 25% of total purchases, highlighting both the importance of overseas investors in the UK commercial property market and the increasing globalisation in real estate investment.

The researcher also suggests that the characteristics of investment in the UK from overseas have changed. Long-term equity capital targeted at central London property used to be the norm, but now the inflows are becoming more opportunistic and targeted at inter-regional portfolios, which the company relates to the significant activity of US sources.

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