Non-European Buying Assets In UK In 2018

Leading analysts and real estate indexes predicted subdued growth in 2018 in the U.K. RICS claimed (in December) that house prices will flatten due to low sales and recommended cautious buying during Brexit. But, the recent reports by Nationwide claim the growth was 2.5 per cent in July (y-o-y).  

Some reports find there has not been much change between the sellers and buyers, and house prices grew 1 per cent in the first half of 2018. However, the listing of properties grew during this time, sales are still progressing, and the market has not halted. 

The property site suggested the number of sellers increased in this period compared to previous years, though the asking price by the new sellers was negative - 0.1 per cent (y-o-y).

Overseas Investment 

Investment from overseas continues to grab the most share of commercial deals in the U.K. It is assumed that Asian buyers make most top deals, but recent reports claim that U.S. investors are diversifying noticeably in U.K. real estate. The 2018 reports, to date, claim North American investors bought properties worth £2.7 billion in the U.K.  

These are commercial properties, developmental lands, student accommodations and offices, where more than 70 per cent of investment went into rental accommodations and offices. In contrast, Asian investors mostly bought offices in the U.K.

Investors from the U.S., China, and Hong Kong are leading investors in real estate in the top cities of the U.K. and Germany. In addition, many new Asian investors from Japan, Singapore, and South Korea are looking for appropriate opportunities in European and U.S. commercial and retail markets.   

Investors from Japan are new to these markets, but the investment is growing. For example, the deal of Japanese company Mori Trust in Boston and another fund buying properties in Seattle are new trends in Japan.

Currency volatility, complex global trades, interest rates, and political situations are influencing the investment decisions of local and foreign buyers. Asian and U.S. investors seek options in the U.K. to diversify in the new markets. In March, Hong Kong firm CC Land Holdings bought the property in London - the Leadenhall Building worth US$1.5 billion.

Investors Invest in Properties

London remains the leading place for overseas buyers, followed by Frankfurt and Amsterdam. Besides, Germany, with a strong growing economy and low political issues, is attracting such investments.

Moreover, many first-time Asian investors are buying commercial and residential properties in these regions due to the simpler tax structure, available liquidity and simpler property regulatory system – as per CBRE.

Many South Korean investors are buying properties in Austria, Berlin, Amsterdam, and Frankfurt. As per the Knight Frank (& RCA / Capital Report 2018), the cross-border outflow was highest in commercial real estate, and Asia Pacific invested up to $90 billion in real estate, which is higher than the E.U. (83.3 per cent) and North America (80.9 per cent). 

The outbound investment from Asia was highest in the U.S. ($19.8 billion) and the U.K. ($19.6 billion). The increase in outbound investment is led to the growth in domestic markets.

To know more about real estate deals in the U.K., click Hamilton International Estates (www.hamiltoninternationalestates.com)