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Foreign investors account for more than 50% of total commercial property purchases in H1 2012

wantspacegotspace.co.uk - Foreign investors account for more than 50% of total commercial property purchases in H1 2012Ben Burston, Head of UK Research at DTZ, said: “Since 2001, when a fifth of commercial property purchases in the UK were by foreign investors, the trend has been steadily upwards. Now, for the first time

over a six month period, overseas investors account for the majority of investment activity in the UK.

“Central London deserves its reputation as a magnet for foreign investment and the flow of money from overseas into commercial property in the capital has increased strongly during 2012.

“We are also seeing foreign investors increasingly attracted to major regional cities in search of yield. However, they are only being tempted beyond the sanctuary of the M25 when security of income is

protected by good quality stock, low vacancy rates and institutional leases to secure covenants. Pramerica’s £69.6m acquisition of 141 Bothwell Street in Glasgow at 6.17% is a classic example.”

Some unlikely towns feature in DTZ’s list of the top 10 towns and cities attracting foreign investment, with most propelled there as a result of a single, large deal. Birmingham and Bristol, which ranked

third and fourth in H1 2011 do not figure in the top 10 for H1 2012, whereas Farnborough and Rugeley are new entries. Central London, multi-region portfolios and Greater London aside, Cambridge sits fourth

after BioMed Realty Trust’s £126.75m acquisition of Granta Park.

Ben Burston said: “Outside London, foreign investors go wherever secure returns are on offer which is why the leading towns and cities tend to vary considerably year-to-year. The Granta Park deal in

Cambridge is typical – a fully let 100 acre business park bought at 7.9% with an average unexpired lease term of 10 years.”

George Alcock, Senior Surveyor at DTZ in Nottingham comments: “Although Nottingham has not made the top 10 list, the experience this year has followed the national trend, with overseas investors active

within the city as evidenced by the acquisitions of Chapel Quarter and Southreef. It is highly positive to note that, for the right opportunities, both Middle Eastern and North American Investors have

requirements in the region given the prospective yields on offer, though typically these are limited by large lot size parameters.”

Posted by The Editor (wantspacegotspace) on 30th October 2012

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