Overseas Investors Seeking Deals in Office Spaces in the UK

Investment is flowing into London properties, even though the rate of performance in London is seemingly low. It is one of the most expensive cities, facing a decline in property prices. In the current market scenario, it offers some rare opportunities in properties in some regions, and this change in property rate fits overseas investors’ budgets.

In June, the pound was low by 10 per cent against the dollar, which boosted buyers’ attraction. 

Though, foreign investors are in doubt over changes in policies regarding stamp duties and alterations in tax breaks. Some buyers are trying to get rapid deals before imposing new tax policies.

Apprehension related to Brexit raises confusion about property prices, and several local buyers are staying away from the market due to such unpredictabilities. Still, some believe the prices, which are going down at present, will rise in post Brexit era. 

In June 2018, a Korean company, Korea Investment & Securities Co. Ltd., bought office space in London. It is a building constructed by a Japanese developer (in 2014) and was previously used as headquarters by a Switzerland-based insurance company.

The deal was finalised in June when the value of pounds was falling, and the rates of the UK properties were growing. The 15-story building (value $266 million) is a Grade A tower located at 70 Mark Lane. 

The property cost in the UK and London has been widely influenced by investment coming from foreign buyers, and the attraction of office spaces in the UK has increased in the past year. Such properties are growingly attracting new investors globally.

It was the first investment made by the South Korean company in London, and it is expected to give returns up to 6 per cent, varying between the currency hedges and sales profits. 

Whist, the land registry data states the most expensive commercial property sold in May 2018 in London (in the City of Westminster) was valued at £92,500,000.

In London, there are homes worth more than £1 million with high asking prices; even though the asking price fell in the previous quarter by 1 per cent, these homes are considered unaffordable for the local buyers.

In addition, the Office for National Statistics data analysis of June 2017 finds more than 330,000 residents moved out of London in 2017, showing the net outward migration of the city was up by 14 per cent in 2017. 

The most expensive boroughs in London include Chelsea and Kensington, that recorded double digital growth in property rates, up to £2.17m (up by 10.4 per cent). In London, nine boroughs recorded a rise in prices, whereas 24 maintained a decline in price (as per the study by real estate firm Your Move).

People working in London are seeking opportunities in employment and house outside, as house affordability is reduced in the city. The highest number of people moving into the city are below the age group 20 to 30 – mostly students studying in various universities. 

Some analysts believe overseas money impacts property prices in Manchester, London, Liverpool and Leeds. London is the favourite destination of foreign investors. Studies claim investment by foreign buyers in the region has been responsible for escalating home costs in the UK.  

To get the latest information related to property prices and upcoming deals, e-mail - Hamilton International Estates (www.hamiltoninternationalestates.com).