For International Individual Commercial Investors, Britain Is Best
The picture from a British investor’s view right now might not be quite so rosy. Nevertheless, it seems as far as private property investors on a global basis are concerned, commercial real estate in the UK is as hot as it gets. More people than ever before are eying up the UK as a commercial property investment hotspot, the latest figures reveal.
Specifically, the report reveals that private buyers accounted for around 27% of all global commercial property transactions last year, while 25% of private wealth is tied up in real estate investments.
“We predict that private investors will continue to take global market share as both the number of wealthy individuals and their assets grow. The number with $30 million or more in net assets rose by 6,340 in 2016 alone, taking the total to 193,490,”.
“We expect that the appetite from private investors for commercial property will continue to increase. The report shows that 32% of ultra-high net worth individuals will invest in cross-border real estate deals in the next two years.”
In terms of wealthy investor populations seeking overseas investment opportunities, the report showed that the United States is slowly but surely being challenged by Asia. As it stands, there are just over 27,000 fewer ultra-wealthy investors in Asia than there are in the United States. However, it is predicted that this will shrink to no more than around 7,000 within the next ten years.
One of the effects of the global financial crisis has been a growing tendency among investors to diversify, both in terms of their portfolios and chosen geographical locations.
“The top markets targeted will primarily be those exhibiting solid fundamentals including tenant demand, liquidity and transparency,”.
“However, increasingly we are advising clients not only on prime office, retail and hotel assets but also strategic investments in growth sectors such as urban logistics, leisure and specialist operating assets including student housing and multi-housing. Overall, property as an asset class remains high on the agenda of private investors.”
Closer to home, investors at all levels in the UK continue to view commercial property investment as a relatively safe haven for the immediate future at least. Once again, H1 capital values have risen 2.5% across UK commercial property, with rental value growth having come out at 0.8%. Not quite as strong as the 1.1% growth recorded during the same period last year, but reassuring performance to say the least.
Of course, the effect Brexit is likely to have on all of the above remains the single biggest unknown for domestic and global property investors alike. So while investment from overseas investors may be on the up, few are throwing caution to the wind having acknowledged that things could look very different just two years from now.