Total investment volumes into commercial property in the UK exceeded £50bn in 2005 (an increase of 18% on 2004), according to figures by Property Data.
A total of £51.1bn was recorded by Property Data; the expectation is for this to increase by several more billion pounds when all 2005 transactions have been accounted for.
A significant contributor was overseas investment, which accounted for a record £16bn, a huge increase of 77% from 2004.
Andrew Hynard, head of National Investment at Jones Lang LaSalle said: “The solid turnover in the UK commercial property market during 2005 is proof that the weight of money chasing assets remains as strong as ever; and there are no signs of that diminishing.
It is interesting to note how attractive UK commercial property is to overseas investors. This is despite competition from other European markets, including developing countries where the yields and returns are appealing, albeit with higher risk profile.”
In 2005, Irish investors were the leading overseas purchasers, having acquired £4bn of UK commercial property.
Julian Stocks, head of Capital Markets, England and of West End Investment at Jones Lang LaSalle said: “Middle Eastern investors invested almost £1.3bn in the West End in 2005, which is 23% of total West End transactions. Whilst Lancer, representing the Abu Dhabi royal family, was responsible for over £900m of that total, we are now seeing strong demand from other countries in the region and expect to see more Middle Eastern investors in the market this year.”
Mark Pickering, director of Property Data added: “In terms of sector activity, shopping centre transactions were down slightly from 2004 as expected, although retail warehouse transactions grew by 28% in 2005. Investment in offices was up by over 20% on 2004, although this masks distinct variations with volumes rising by over 38% in Central London, but down by 8% across the rest of the UK.”
