Wealth property funds are increasingly pursuing prime property in central London, according to research by CBRE.
The recent announcement that the world’s largest pension fund, Japan’s Government Pension Investment Fund (GPIF), is shifting into the London market has reaffirmed a growing trend for affluent Asian investors to target England’s capital city. GPIF has previously focused solely on Tokyo, Japan, but is now looking further afield.
CBRE, a commercial property and real estate services adviser, expects a surge of capital to flow into London in the coming months.
Investors from the Asia-Pacific region has recently shown interest in the European market, especially Australia's superannuation funds and Taiwan's insurers. London has been a particular safe haven for potential buyers, with CBRE figures highlighting that the capital city attracted 21 per cent of all European inward investment in 2012.
Simon Barrowcliff, executive director for central London capital markets at CBRE, told Property Magazine: “As 66 per cent of the world’s middle classes will be of Asian origin by 2030, it is inevitable that the corresponding volumes of assets under management by these countries’ pension funds will likely grow.
"Central London property will capture a large share of this capital. These examples show the continuing weight of expected flows into the London real estate market, which will further support current prime pricing in the capital."
As more overseas investors look to diversify their property portfolios, it seems that London remains the epicentre of commercial investment.