Britain remains top dog for foreign investors
The UK commercial property market has again been confirmed as the most attractive destination for non-European investors, according to the latest research from integrated corporate real estate firm DTZ.
Approximately €10bn of investment in the UK's property market came from non-EU parties; centred on the London region and South East England. This equates to around two-thirds of the total amount invested during 2012, with such figures representing 37% of the total activity from foreign investors on the continent as a whole.
Consistently high valuations on the London market have ensured that commercial property in the capital has continued to be viewed as a safe investment, with further government initiatives to create a technology hub in East London already baring fruit. Regional markets, once battered by the financial crisis, have also begun to show shoots of recovery.
Ben Cook, head of UK inward investment at DTZ, said: “The UK, and in particular central London, is one of the top markets globally for foreign investors. Over the past 10 years investors from no less than forty countries outside of Europe have invested in the UK, double any other European market.”
The report also showed the UK market boasted 6.4% liquidity during 2012, the third highest on the continent. The liquidity poll, which divides a country’s invested stock by its volume of investment, was topped by Sweden on 9%, despite it only ranking eighth as an investment market with an inflow of approximately €106bn.
Norway ranked second in the listings at 8%, whilst the UK was closely followed by the Polish and German markets on 6% and 5% respectively.
“Commercial real estate investment activity in Sweden has rebounded strongly since the onset of the global financial crisis reaching close to €10bn in 2012”, according to Nigel Almond, Head of Strategy Research at DTZ.
“The market, along with the wider Nordic region is perceived as a relative safe haven during the recent crisis. The banking sector also avoided many of the worst excesses of the boom period supporting a much stronger recovery. It is therefore no surprise to see two Nordic markets taking the top two places.”
With Sweden only a sixth of the geographical area of the UK, today’s news indicates that a country’s ability to attract overseas investment is not based solely on the assets on offer and potential for further developments. Magali Marton, head of CEMEA research at DTZ, commented: “The research highlights that size is not all when it comes to liquidity.
“There are a number of relatively small markets displaying higher levels of liquidity. These markets should really be on the radar for more internationally-focussed investors. A number of markets including Sweden and Poland rank well on both an overall and an inter-regional basis and could therefore justify attracting higher levels of overseas capital.
“Despite its position as one of the top markets by size, France could do a lot more to increase its relative attractiveness to investors given its low rankings, particularly its attractiveness to overseas capital.”