Asian investors have been making quick profits from sales of some of London’s largest office buildings, according to Cushman & Wakefield.
The property advisers have reported that since 2009 Asian investors have cashed in £3.4bn of London property, picking up £870m in profits in the past two years.
The most profitable deal to date was South Korea’s National Pension Service sale of HSBC’s Canary Wharf headquarters for £1.2bn generating more than £400m of profits.
Bob Sturges, Head of Communications at Omni Capital, a leading provider of prime real estate funding, said it the capital remained a global safe haven offering reasonable value and solid capital appreciation.
"Despite some slackening in interest from Chinese and south-east Asian- based investors, London's pull remains compelling for many international buyers and speculators,” said Bob Sturges.
"This has not been lost on developers specialising in this particular part of the market.
“If they select their locations well and produce a product of the highest quality, they're still able to sell to foreign buyers at significant premiums.”
Bob also said Omni Capital took this into account when assessing individual funding proposals which explained why currently many parts of prime central London we were seeing unrealistic valuations.
“We suspect many cannier overseas investors have reached a similar conclusion, which is why the best opportunities now present themselves in the less heated-up parts of the capital,” added Bob.
“It's where we too are focusing our attention, and we expect to see continuing demand both for real estate development and its attendant finance.”
When asked whether the rise of overseas investment was a good thing for the UK market, Bob repliadded that in a highly -competitive globalised market it was difficult,, and not smart, to erect barriers to the free movement of capital.
“Whilst the impact of overseas money on high-end property prices is undoubted, it has been far less dramatic further down the price scale,” added Bob.
“Here, supply and demand is the problem. It would be a grave mistake to confuse the two."
Ashley Ilsen of Regentsmead added that foreign investment was a good thing but too much could see house prices inflate.
London is of course a very desirable hub for investment for many reasons but I think it would be beneficial to direct it to other parts of the country too,” said Ashley.
“We’ve definitely seen an uplift, particularly in some schemes we have funded recently they have been backed by individuals from countries as far afield as China and Russia, but again this has been very London-centric.”
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