North American Investors Look to Central London Commercial Property

Investors return to London in a stronger than expected first two quarters of the year. The Central London commercial property market cashes in as investors veer away from the euro zone.

North American property buyers returned to the buoyant Central London commercial property market during the first two quarters of 2011, as investors once again look favourably to British shores. This is according to property-services company CB Richard Ellis.

The U.K. commercial property market has always had an infinity with foreign investors, and London is usually the hub of financial transactions due to its size, transparency and liquidity.

Non-European buyers have always been vital for the European market. They invested €24 billion in commercial real estate in 2010 and in the first half of 2011, with North American investors accounting for €3.1 billion of that. The Central London commercial property market received €5.1 billion of this, CB Richard Ellis claims.

London is also expected to benefit further throughout the last two quarters of 2011 with foreign investors looking to invest in the European market but staying away from the delicate euro zone situation.

Robert Hodges, managing director of Carlyle Group said: “The U.K. has been one of the most-active markets for our fund, as there is liquidity in the market, represented by the number of properties on the market, and a more realistic view of pricing compared with some Continental markets,”

“The exchange rate and low interest rates are favourable, and the fundamental longer-term growth prospects are encouraging,” he added.

However, the London’s oversupply problems means North American interest may not actually be sufficient to keep Central London commercial property prices buoyant. In London there is currently some £5 billion of City real estate for sale but not all of it is deemed suitable or prime property for investment.

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