Investors from non-EU countries have significantly increased demand for commercial property in the City, as European countries have largely decreased their investment across 2018 – boosting total transactions for last year ahead of 2017, by more than £3 billion.
EU investment decline vs newcomer non-EU boost
Non-EU investment in City of London buildings was up 75 per cent (to £8bn) while EU country investment fell 68 per cent (to £885m) in 2018 over 2017 according to Datscha – the proptech platform showing the ultimate owners of commercial property
2018 Dynamics over 2017
A variety of overseas investors from countries including South Africa, Israel, South Korea and Saudi Arabia completed purchases of City-based buildings – predominantly in the office sector.
- South Korean investors spent more than investors from any other country, totalling £2.4bn
- Chinese and Hong Kong investors were also one of the top spenders, purchasing over £2.3bn, but, this is down 43% year on year likely due to the restrictions placed on Chinese investors by their Government.
- South African investment totalled £400 million from the purchase of Riverbank House (No purchases in 2017)
- Israeli investment totalled £90 million from the purchase of the Relay Building (no purchases in 2017)
- North American investment doubled to more than £1.26 billion driven by the US share of Devonshire Square (total sale price £580m – WeWork/Colony North Star invested from the US 55%
Datscha, the proptech platform which shows ultimate ownership of commercial properties, revealed the data in their transactions module which indicates deals worth more than £3million each – those deemed of economic significance to the market. Datscha has further been able to corroborate its research by uncovering portfolio deals matched with latest Land Registry data – using the period from January 2017 – December 2018
Lesley Males, Datscha’s Head of Research, commented: “The dynamic for 2018 has clearly been driven by the adjustment considered in 2017 influenced by the UK’s political uncertainty and weakening of Sterling, yet, this has still brought positive interest in the City of London from a number of overseas buyers wanting a stakehold in what we believe is an ever-appealing investment zone.
Although 2019 has begun with low investment volumes to date, 2018 is the true barometer of the value of the City, and our data shows healthy interest from all corners of the world.”
