New research by property law firm Nabarro and advisers FTI Consulting has revealed that commercial property in London will remain attractive to Middle Eastern and Asian investors over the next five years.
In a survey of 600 investors, nearly 75 per cent revealed that they were planning to develop their London portfolios by 2018, as they see the UK as a safe haven. With good educational resources, a healthy legal system and high returns for buyers, many are looking towards secondary sites to avoid high property values and rife competition. Other reasons for people turning to the UK include current tax conditions (29 per cent), planning laws (28 per cent) and a good regulatory framework (25 per cent).
“Legislative changes in a number of Far Eastern locations – notably for Chinese insurance companies – are expected to lead to a significant outflow of cash." the report said.
Offices were considered the most favourable investment, while 35 per cent of respondants stated that while the retail sector was exciting, it's too risky.
However, UK immigration policies could become problematic for investors, according to the report. Some 69 per cent believed that this was their biggest barrier to investment, while concerns over a British exit from the EU and uncertainty over the EU economy was also concerns.
Generally, however, the next five years should see interest in British investment grow greatly, according to the report. London, and other major cities in Western Europe, such as Paris and Berlin, are said to be 'hot spots' for high yields and strong competition.