Tag Archives: real estate
Overseas investment in UK commercial property market set to increase
Overseas investment in the UK commercial real estate market is having a positive impact and is set to increase over the next three to six months, according to new research. There has been a slight tapering in confidence after nearly two years of consistent growth in optimism and fewer property professionals expect investment to increase but around 60% of UK investors believe foreign investment has had positive impact. Increasing numbers expect activity to stabilise and the North West and London based smaller sized operators are more confident about the future, according to the latest confidence survey of real estate professionals by Lloyds Bank Commercial in association with the Investment Property Forum (IPF). Further analysis revealed that nearly73% of larger sized businesses surveyed and 70% of fund managers agreed, though this figure dipped to 60% amongst SME respondents. Given the increased level of foreign investment into this sector, a significant minority, at least 17%, of all respondents said that they had changed their business investment activity as a result of the influx of overseas capital. In particular 42% of fund managers and 30% of larger sized businesses stated that they have altered their business investment plans due to this influx. ‘For many regional commercial property operators the influx of foreign capital has widened the range of exit options and shifted focus away from UK institutional buyers,’ said John Feeney, global head of commercial real estate at Lloyds Bank Commercial Banking. ‘'Further a variety of foreign buyers are now active in regional UK markets including sovereign buyers seeking stabilised assets and more opportunistic investors willing to take asset management risk,’ he added. The latest survey also indicates that confidence in the UK’s commercial property market remains high, with over 60% of respondents believing that activity will continue to increase over the next three to six months. However, an increasing number believe that the market will level out. Around 25% to 36% of respondents now expect activity to remain at current levels for the next three to six months which compares to just under 20% in the CPCM’s last report in April. In line with a slight softening in confidence, the report suggests that prices will begin to stabilise as well. In the Spring 2014 CPCM only 3% of major businesses said prices would stay the same compared to 30% in this latest survey. Investment activity also looks set to increase, with fund managers reporting a slight increase in their investment intentions, rising from 70% to 72%, as did major businesses, with 53% planning to spend compared to 50% in April. ‘The UK’s market has soaked up a lot of capital over a short period of time and some investors, such as private equity funds, are turning their attention to the nascent investment market recovery in certain Eurozone countries particularly in the periphery,’ said Feeney. ‘The UK market is further advanced in… Continue reading
African lion starting to roar louder than the Russian bear in prime London market
The Russian bear is roaring less now in the prime London property market as the African lion takes over with rich Africans spending over £600 million on real estate over the last three years. New research suggests that wealthy buyers from just six countries; Nigeria, Ghana, Congo, Gabon, Cameroon and Senegal, are snapping up luxury property in the city. Nigerians are the top buyers in London spending over £250 million and buyers from Africa favour key addresses in Mayfair, Belgravia and Knightsbridge. Overall African oligarchs now account for 5% of all ultra prime residential sales by value, up from 2% 24 months ago, according to the data from top end agents Beauchamp Estates. The top 10% of buyers are spending £30 million upwards on homes while 80% spend £15 million to £25 million on London property and they prefer newly built or newly refurbished properties, the research also shows. They also want a property with parking as trophy cars are a passion amongst wealthy families. They are also renting luxury homes and will spend £10,000 to £15,000 per week on a top London property but tent to seek short term lets of six weeks to three months. There are 15 key addresses favoured by African buyers: Eaton Square, Belgravia, Holland Park, Kensington, Addison Road, Kensington, Charles Street, Mayfair, Grosvenor Square, Mayfair, The Bishops Avenue, Hampstead, Winnington Road, Hampstead, Regents Park (mansions), Compton Avenue, Highgate, Templewood Avenue, Hampstead, Avenue Road, St Johns Wood, Campden Hill Road, Kensington, Kensington Palace Gardens, Kensington, One Hyde Park, 100 Knightsbridge and The Knightsbridge Apartments, Knightsbridge. Prime London residential property is seen as a good, safe, secure and stable investment by wealthy buyers Africa but there are also historic cultural and community ties. There is a 70,000 strong Nigerian community living in London, Ghana has a 56,000 strong community in the capital, whilst the Gabonese London community consists of some 3,000 people. Wealthy Africans are also keen to send their children to top schools in and around London such as King’s School Canterbury, Wycombe Abbey, Cheltenham Ladies College, Eton, Harrow and Bradfield. The Nigerian Embassy in London has estimated that Nigerian nationals now spend over £300 million per annum on fees, study equipment, tutoring and accommodation at British schools and university. ‘It is going to be the African century and these six countries are the standard bearers in the London property market. Continental African buyers or luxury tenants in London are currently where the Russians and Ukrainians were five years ago,’ said Gary Hersham, director at Beauchamp Estates. ‘They have the resources and desire to purchase or rental luxury homes in prime central London, but they have less knowledge of the best properties and addresses and seek our local knowledge and insider advice on where to buy and what makes a good investment. At present virtually all the transactions are for end use, not rental investment, which indicates that the African buyer market in London has significant room for growth… Continue reading
Prime central London house prices expected to be flat for rest of 2014
House prices in the prime London market are expected to stay flat until end of the year after slowing considerably in the third quarter of the year. House price growth across the sector slowed to 0.5% from 3.1% in the previous quarter, according to the latest London Property Monitor from estate agent Marsh & Parsons. The data also shows that the ratio of buyers per property dropped to 12 in September, as supply soared 13% in three months. However, one and two bedroom homes in the outer prime London sector outperformed the rest of the city in annual growth stakes, up 19% in past year Overall, following a robust 11.4% climb in prime London property values over the past 12 months, equivalent to £163,973, there has been a sharp drop in the rate of quarterly price growth across the capita. The report suggests that house price rises have been steadied by rising supply of prime London property on the market, up 13% in the last three months. This has cooled the level of competition in the market and the number of registered buyers per available property in Prime London has fallen from 24 at the start of 2014 to 12 in September. ‘We’ve reached a plateau in the course of house price growth, and the path paved out for London property prices for the rest of 2014 looks to be levelling off. This isn’t terminal, but just a necessary pit stop in the long term growth and sustainability of the market,’ said Peter Rollings, chief executive officer of Marsh & Parsons. ‘And it doesn’t mean we’re in for a quiet winter either. Sales will continue, albeit at a more normal level, as buyers revel in the greater choice on offer, and without the frenetic competition many faced at the start of the year. With more realistic pricing sellers are prospering too, and on average 98% of the asking price is currently being achieved on properties sold,’ he explained. He pointed out that in the hubbub surrounding the property market recently, seasonal patterns have been lost in translation. The majority of house price growth typically falls in the first half of the year, so this autumnal re-calibration is nothing new. He believes that in the run up to the general election next May caution will be exercised by many home owners and would be investors, as high end property is marked out as a key battleground for politians. ‘Wading in with a mansion tax threatens to douse the growth at the top tiers of the market, and in London especially, thousands of ordinary families would get swept up in its wake. Packaging it as a levy on mansions is misleading as across the capital it is tricky to find a home big enough for your average 2.4 family without a million pound price tag,’ added Rollings. The agent believes that there are still strong capital gains to be had… Continue reading
