Overseas buyers boost London’s commercial property market

Posted on 20 January, 2011 by MOVEHUT

This is the second consecutive year in which London’s commercial property market has likely draw maximum cash from the rising rental income as far afield as Qatar, Hong Kong and Canada.

Sales of the property existing in London summed to $13.9 billion in the initial 9 months, greater than any other city, as state by Real Capital Analytics report with some of the largest deals announced in the final quarter of the year.

There is a huge surplus of people willing to invest for buying a home and the common thing among all is the desire for yield. A major London office property at a rate of 5-6% yield looks great against the alternatives, as per Dan Fasulo who is the managing director at Real Capital Analytics.

Sovereign wealth funds, cash rich pension funds , wealthy individual and insurers bought offices, luxury homes and shops in the Central London at a low rate of interest and fears that the global economy will decline making other investments less appealing and riskier. London also ranked top in year 2009 with sales touching 16.8 million, as per the report.

In the last 2 months, a sum of £448 million is agreed to be paid for a bet in Regent Street by Norway’s sovereign wealth fund. A new European headquarters is purchased by Chase for £495 million and Canadian and Dutch retirement funds signed a £872 million deal providing them part of the Westfield Stratford City mall near to the location of the 2012 Olympics.

Fasulo stated, “Negative real rate of interests states that people won’t buy corporate bonds, government bonds as they already had an unbelievable rally, gold doesn’t provide you a yield and stock market would stay volatile”.

 




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