December 19, 2014

Overseas investors take biggest commercial property stake

The Property Industry Alliance (PIA), which brings together eight leading property organisations, recently revealed that the value of portfolios held by overseas owners had more than doubled (129 per cent) over the last decade to £94 billion.

The increase means that overseas investors now own almost one quarter (24 per cent) of all commercial property investment in the UK, the alliance’s Property Data Report 2014 found. Three-quarters of the investment is in London.

In contrast, the total owned by UK institutions fell by 16 per cent over the decade to £75 billion. The research also revealed that:

Average rental increases over the last ten years in the office (1.1 per cent) and retail (0.5 per cent) sectors have risen at a much slower rate than other business costs and well below the rate of retail price inflation (3.3 per cent)
Of the £683 billion in total UK commercial stock, retail is the largest sector by value (£305 billion), followed by offices (£195 billion) and industrial property (£126 billion). Other commercial property, including hotels and leisure, was valued at £58 billion
The commercial property industry directly employs almost 900,000 people, and contributes about £54 billon to the UK economy, equal to the telecoms and transport sectors combined, and contributes almost £14 billion in direct taxes to the Exchequer.
As the sector’s positive performance continues, expert legal advisers can add real value to the operations of property companies, investors, commercial landlords, developers, banks, serviced office companies and financial institutions.

At Royds, our commercial property team are available to advise individuals and businesses on lettings, leases and all aspects of property transactions. For more information please visit our website or contact Gareth Williams or Bharat Nahar.

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