Back to blog
Kal Vaughan
Kal Vaughan
  • 1 Minute Read
  • 01st May 2013

London outshines the entire UK for real-estate investment

Investors bought more commercial real estate in central London last year, than in the entire UK, according to a recent report by DTZ (UGL), the global corporate real estate services provider.

For the first time overseas buyers favoured the UK capital, which saw a 48% increase in acquisitions of income-producing office buildings, stores and warehouses.

Last year, a record £16.1bn was invested in London’s commercial real estate, while the rest of the UK saw an 18% drop from 2011’s levels in commercial property venture.

Commenting, head of UK Research at DTZ, Ben Burston said: “The surge in investment activity in central London can be linked to very strong demand for prime U.K. assets from foreign investors [...] London offers large lot sizes and liquidity.”

Britain is Europe’s largest property market and the second-most liquid in Europe after Sweden, said DTZ in their report, which reported a 61% increase in commercial property purchasing on 2011’s levels.

“Good liquidity is essential,” said the global head of research at DTZ, Hans Vrensen, “If you cannot buy into and then later sell out of a market, relative value is immaterial.

“We highlight the U.K. alongside the U.S., Germany, China and Japan as especially attractive to international investors,” he said.

Throughout Britain, buying conditions are at their best since 2002, according to DTZ, with non-London properties readily available at lower prices, and being able to facilitate increased returns on investment.

The value of non-bank debt rose by 35% last year, as commercial property investors have been unable to secure financing from banks that are reluctant or unable to extend credit.