73% of London’s deals done by overseas buyers

A key theme for the London real estate market over the last few years has been the rise of the Chinese and Hong Kong-based investors, whose overseas investment appetite has grown exponentially.

Central London property market has witnessed significant capital inflows since the referendum, despite an initial pause for breath. For London real estate, the shift towards a wider world of occupiers and investment capital is at an advanced stage. Last year, 73% of transactions involved an overseas buyer compared to 65% in Singapore, 40% in New York and 33% in Paris, says The London Report 2017 by Knight Frank.

A key theme for the market over the last few years has been the rise of the Chinese buyer, whose overseas investment appetite has grown exponentially. While capital controls have been put in place in China to control outflows, Knight Frank expects Chinese investment in London to continue in 2017, although it may slow as overseas reserves are depleted and mechanisms of getting capital out of the country are restricted.

“Appetite for London commercial property from China and Hong Kong-based investors remains strong. Indeed, the currency advantage that resulted from the outcome of the referendum has made the UK in KNIGHT FRANK

general even more attractive to these buyers. Looking forward, given the continued drive for diversification, we expect the UK’s capital, which boasts strong liquidity and a robust economy, to remain high on Chinese and Hong Kong investors’ wish lists,” says Nicholas Holt, head of research, Asia-Pacific, Knight Frank Asia-Pacific.

“A wall of overseas money is migrating towards London. The main problem facing investors will be sourcing stock. In the investment market, overseas investors are showing a strong appetite for London offices,” says Stephen Clifton, head of Central London Offices, Knight Frank.