You will no doubt be aware of the vast number of commercial properties in the UK that includes the likes of industrial units, shops, supermarkets, hotels, retail parks and office blocks. Construction of such properties continues in many parts of the country providing employment for those in the building trade and, of course, for those people working for businesses that are taking up occupancy of such premises.
However, have you any idea where in the world many of the investors in these properties are actually from? The perception is probably that the vast majority are based here in the UK.
Well, you would be correct. However, in the last 10 years, there has been a big increase in the number of overseas investors in commercial property.
The Property Industry Alliance (PIA) that includes the likes of the British Council of Shopping Centres (BCSC), Royal Institution of Chartered Surveyors (RICS) and the Property Committee of the Association of British Insurers (ABI) has produced the Property Data Report 2014. This report reveals that, as at the end of 2013, 24% of those now owning commercial property for investment purposes in the UK are from overseas – that is almost a quarter. In the region of 75% of such property is in London.
What is significant is that such overseas investors have increased their ownership in commercial bricks and mortar in the UK by 129% in the ten years leading up to 2013. That now makes them the largest group of owners putting the likes of UK institutions (pension funds and insurance companies) in second place at 19%. In fact, in the last 10 years the latter group have actually reduced their holding in UK commercial property by 16% – a significant drop. The third biggest owners are collective investment schemes such as managed funds and unit trusts that invest in property. In total, £385 billion is invested in commercial property.
It will be interesting to see what happens over the next ten years in terms of ownership of UK commercial properties.
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