Although 2011 looked set to be a tough year for investment opportunities in commercial properties around the UK, a total of £32.5 billion was spent by investors in the market. This figure is just over £3 billion less than 2010, which experts predicted would be far worse.
Investments have slowly increased over the last four years, as in 2008, £24.25 billion was invested, whilst 2009 saw £25.2 billion.
The 2011 figure was believed to be helped by a final push towards the end of 2011, the uncertainty of the Eurozone, long lease availability and security of income, as Head of UK Capital Markets at CBRE, Simon Blake expressed: “Despite the continuing uncertainty in the Eurozone, the UK commercial property investment market had a healthy 2011 and continues to stand head and shoulders above any other European country in terms of its attraction as an international property investment hot spot.”
Commercial properties in London have continued to be of interest to investors, especially to the foreign market, as it accounted for £8.4 billion of the £32.5 billion. London is especially strong for investors from North America and Asia, as Mr Blake stated: “Central London, in particular, remains the most important city in Europe, when it comes to direct real estate investment. Since the ‘credit crunch’ in 2008 cash rich foreign investors from Asia, North America and Middle East have sought quality and stability by setting their sights on the capital in an attempt to diversify their assets.”
The UK commercial property investment market continues to outperform its fellow EU countries, with Germany coming in second at £19.6 billion and France coming in third with £13 billion. But why is the UK such a strong investment market? Mr Blake believes it is to do with certain characteristics: “The UK’s attraction for commercial property investment reflects a number of key attributes, including the size, depth and liquidity of its investment market, the transparency it offers and the long lease structures which benefit investors.”