British property buyers and investors in central London overtook those from overseas during the first three months of 2015 for the first time in almost two years.
Global property buyers continued to invest strongly in Central London office property with £3.1 billion worth of transactions in the first quarter of 2015 according to latest research by CBRE. This was up from £2.9 billion for the same period last year but down some 55 percent on the £6.8 billion of transactions seen in the final quarter of 2014.
However, U.K. investors were more active than those from overseas, representing 51 percent of transaction values, compared with 49 percent for non-U.K. investors. This is the first time British investors have outstripped their overseas counterparts since the third quarter of 2013 when coincidentally, they accounted for the same percentage of investments.
Foreign investment in Q1 2015 was dominated by North American money (£641 million) with Asian investors in second place (£443 million). Acquisitions by Asian investors during the quarter took their total spend in Central London offices to £10 billion since 2013, the same amount they spent in the preceding 23 years.
Simon Barrowcliff, Executive Director, Central London Capital Markets, said: “The Central London rental growth story remains a compelling opportunity for both domestic and overseas property investors.
“For the first time in more than 18 months we have seen transactions backed by U.K. money overtake deals supported by overseas investors, which perhaps indicates the optimism that exists domestically in relation to that growth.
He added that U.K. investors accounted for only 31 percent of all transactions in the whole of 2014.
“The growing Asian appetite for London is a reflection both of the effects of deregulation in some key markets and the continuing domestic weakness of others, compelling investors to seek better returns in London and elsewhere.”
Andrew Batt, International Group Editor of PropertyGuru Group, wrote this story. To contact him about this or other stories email andrew@propertyguru.com.sg