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Record Breaking Foreign Investment into UK Commercial Property Market

According to the latest research, £27.8 billion of international capital spurred the UK’s commercial property market in 2015, setting a new record for commercial property investment in the UK.

Commercial Property Investment International 2015

Research compiled by commercial property information provider CoStar found that of the total £67.5 billion investment into the UK’s commercial sector in 2015, 46% can be attributed to international capital, amounting to a record £27.8 billion.

 

Figures show that some of the largest deals of 2015 consisted of portfolio deals made by international investors, such as Canada’s Pension Plan Investment Board’s £1.1 billion purchase of the Liberty Living student accommodation portfolio. The report found that the key commercial investments of 2015 were predominantly made by buyers located in Hong Kong and Singapore, looking to capitalise on the UK’s growing property market.

 

Outside of London, there was extensive growth for the UK’s ‘Big Six’ regional cities. Investment in office blocks in Birmingham, Bristol, Edinburgh, Glasgow, Leeds and Manchester rose by 16% in 2015, generating £3.2 billion for the commercial property sector.

 

As London property becomes increasingly difficult to source due to high demand, international investors seeking standing assets and development opportunities are looking towards the regions for a greater selection of investment opportunities.

 

Mark Stansfield, Senior Real Estate Analyst for CoStar, believes that ‘investors have the money to spend and are seeing the value outside of Central London’, stating that, ‘the political will behind the Northern Powerhouse has given the regions an additional shot in the arm.’

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