Overseas investors, especially from Germany, dominated the UK property market in the period immediately following the withdrawal of sterling from the exchange rate mechanism. They chased relatively high-income yields available from blue-chip tenants tiedinto long leases.
With most good-quality, safe investments snapped up, foreign institutions and individuals bought buildings worth £820m last year, compared with £1.53bn in 1993.
According to Stephen Newbold at Knight Frank & Rutley, the property agent, foreign investors are unlikely to be as active in the next development cycle in London as they were in the late 1980s, because of the heavy losses incurred by many.
The running was partly taken up by UK purchasers, who spent £1.45bn last year, up 21 per cent over 1993. The most active were institutions funding developments and occupiers buying their own buildings.
Figures from Jones Lang Wootton showed unsatisfied occupier demand at more than 1 million square feet, 28 per cent higher than a year earlier.Reuse content