London is the most profitable city for commercial real estate investments
London Bretix is still known as a profitable city to make commercial property investments despite the uncertainty and declining real estate values.
Despite the depreciation of the strongest rivals in the real estate sector against Manhattan and Paris, commercial real estate investments are moving on a lively course. Many domestic and overseas investors are making commercial real estate investments in London.
According to the report of international real estate company Knight Frank, investors invested £ 14.3 billion in Manhattan, £ 12.1 billion in Paris and £ 8.4 billion in Hong Kong. In 2018, London was invested $ 16.2 billion.
Total investment volumes in central London decreased slightly from 2017 onwards. However, in 2018, the average transaction size was 81.5 million pounds and reached the highest number of recent times.
Despite the economic hardship, China has been the largest investor in the London commercial real estate market. China accounted for 21 percent of investment in London offices last year.
In 2018, South Korea increased its investment in London. In 2017, South Korea raised eight-fold investment of 300 million pounds.
In addition, China is expected to be the country that makes large investments in the next year.
‘Although 2019 presents ongoing challenges, international investors remain undeterred. Our Global Capital Tracker identifies £40 billion still targeting London this year, with some seeing the political turbulence and currency weakness as an opportunity, combined with the strong occupational market fundamentals,’ said Nick Braybrook, head of central London capital markets at Knight Frank.
‘Whilst demand from Greater China has reduced, they were still very active in 2018. The reduction is also partly countered by increases in demand from Singapore and Japan, and interestingly the tracker shows an increase in domestic demand this year. Domestic demand is often the first to react to improvements in occupier market trends,’ he added.
According to William Franklin’s chairman, William Beardmore-Gray, London is one of the most profitable cities for long-term investments.
He told ‘Big banks like Deutsche, tech giants like Apple and Facebook and life sciences groups like GSK are the heartbeat of our capital. The growth in co-working space is a positive sign of London’s dynamism and the vitality of the creative economy. London’s resilience and reputation as a safe haven for investment, despite Brexit, is remarkable.
Despite the political uncertainties, London commercial property will be a profitable location for investors in the coming years.
Sevdenur Demir / [email protected]