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27 Dec 2012

Foreign Investment Drives 25% Hike In Value Of London Real Estate Deals

Foreign investors helped to push up the value of property deals in UK´s capital by a quarter in 2012, according to new research from real estate advisory group Cushman and Wakefield. London saw sales of offices, shops and hotels hit £13.6 billion this year, the strongest level since 2007, the data showed.

Foreign investors accounted for 75% of purchases during this period, which underlines London´s ability to lure heavy overseas investment. Investors from Asia, in particular, showed great interest in the London property market this year, being involved in 45% of the transactions completed in the period, according to the research.

Several sovereign wealth funds from Malaysia led the Asian investment into London real estate, whilst the City, West End and Canary Wharf have also attracted investments from government-backed funds from South Korea, Singapore and Indonesia.

Cushman and Wakefield´s head of investment in the City of London, Bill Tyser, said that the property market in the capital was operating in different economic conditions compared with the rest of the country.

According to Tyser, the interest from foreign investors is likely to remain strong in the foreseeable future thanks to the perceived security of commercial real estate in London amid the economic and political turmoil that has hit many countries around the world.

The improvement in activity in London is in sharp contrast to the rest of the real estate market in the UK which has been struggling because of insufficient bank financing and a lack of interest from foreign investors.

Copyright © M2 Bespoke 2012

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