Foreign ownership of the City, London’s historic core, has risen dramatically. According to a latest news report foreign institutions, who form the majority of office space owners, and are not shying away from investing in prime property despite the gloomy economy.
German, Middle Eastern and American investors are snapping up Square Mile office properties. In fact, more than 50 per cent of the entire available floor space in the City has an ‘overseas buyer’ tag attached to it. London’s top-rated office properties are being deemed as safe investments, and continue to attract the most attention, as the figures indicate.
The office space market in the capital city has witnessed transactions worth more than €70 billion. In comparison, the Paris office sector attracted about €40 billion in transactions while the numbers for Frankfurt were much lesser, at €11 billion. The point to be noted is that these numbers have been recorded in the period following the financial calamity.
Not only did foreign buyers make up the majority of London office property owners in terms of market share, but they also led from the front in terms of value. On an average, the value of office buildings purchased by the country’s investors is £27 million while that for overseas buyers stands at a whopping £91 million. It was seen that foreign buyers preferred prime assets, while UK investors couldn’t afford the same.
It is also believed that foreign ownership of grade A City offices can move to over 90 per cent in the coming years. With no sign of the financial conundrum getting solved any time soon, overseas buyers will continue to direct their wealth into the London office property market and away from other volatile markets.