International investors are betting on London commercial projects as opposed to putting their money in property funds, according to a recent Bloomberg article.
The report notes that the current shift is a bold one, taking into account that foreign property investors are taking a risk to increase their returns as the market in the country recovers.
Some of the biggest property investors right now are insurers, pensions and sovereign-wealth investors. Some of them have entered into partnerships with companies such as Land Securities and Great Portland Estates to get developments off the ground.
The news agency initially reported that investors were careful about where they were investing their money.
Institutions like the Norges Bank Investment Management, Canada Pension Plan Investment Board, and GIC Pte, the Singapore sovereign-wealth fund, are entering into strategic ventures with commercial property developers in the United Kingdom as they see real estate prices on the rise.
These investors know that getting the skill-set they need on the ground is difficult for higher-risk, higher return deals. They are making the smart choice to go in with a partner.
With a joint venture, the foreign investors have the chance to get introduced to the UK market and obtain ongoing product knowledge. Domestic companies get access to new sources of funding without having to give up control of their property developments.
