Asian investors, attracted by increasing rents and a weak pound, made up almost 50 percent of all buyers in the London real estate market in 2009, according to research conducted by Knight Frank LLP.
Investors from Singapore, Hong Kong, Malaysia and China accounted for 28 percent of London home acquisitions in 2009 to March, the London-based broker said. Acquisitions from the rest of the region, not including India, amounted to 18 percent, while British buyers represented 37 percent of sales.
“Current international investment demand is almost totally concentrated on London and is primarily coming from Asia,” said Liam Bailey, head of residential research at Knight Frank. “The interactions of currency movements, strong capital price growth and, more recently, rising rents, have created an attractive investment case.”
Chinese investors are also planning to purchase property overseas to spread their risk if the market in mainland China bursts, said Knight Frank. The broker said many are still looking to enter UK universities, with the number of students from Asia studying in the country increasing 175 percent over the past decade.
The most attractive home units for Asian investors are situated in the two central London zones and near a subway station. These locations also feature high-quality security and facilities, it added. The new East London rail line is one example, attracting foreign investors.
Asian investment in the London property market has totalled 761 million pounds ($1.1 billion) over the past year. Out of the 7,579 new homes built last year in the 11 boroughs that comprise central London, 41 percent were purchased by investors rather than homebuyers who planned to live in the residence.