Foreign investment in UK property up 70%

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The Independent Online
OVERSEAS investment in UK property rose 70 per cent last year to pounds 2.2bn, according to a report from DTZ Debenham Thorpe, the surveyor, with German investors again to the fore.

The influx of foreign funds was the highest since 1990 when the market was dominated by Japanese and Swedish investors, many of whom bought properties at the top of the market.

As in 1992, Germans took the largest share, spending pounds 700m, including the biggest single foreign investment of pounds 180m in One Exchange Square, the home of the European Bank for Reconstruction and Development in London's Broadgate Centre.

The other main sources of funds were the Middle East ( pounds 350m) and the Far East ( pounds 440m).

During 1993, the Barkers Centre in Kensington passed into foreign hands as did County Hall (to a Japanese buyer) and Battersea Power Station (to Hong Kong).

John Rigg, investment director, said: 'The low cost of long-term money and the bond characteristics of UK real estate have produced an irresistible combination for many overseas institutional and private investors.'

Fears that overseas investors would turn sellers in 1993 proved unfounded, with disposals by foreign players amounting to only 18 per cent of total purchases.

Mr Rigg added that capital growth was expected to continue in 1994 with UK institutions taking up the running from overseas players, whose largely debt-financed purchases would be threatened by falling rental yields.