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East Asian investors snap up UK real estate

By Surrenden Invest | March 8, 2019

East Asian investors snap up UK real estate

It seems that the ongoing Brexit debacle has done little to deter Asian investors from snapping up real estate investment opportunities in the UK. In fact, the damage done to the pound’s value by Brexit has acted as an incentive for some investors, who have been able to get more for their money in the UK as a result of the country’s decision to leave the EU.

Within Europe, the UK remains the top target for Asian investment, according to 2017 figures. Meanwhile, a report by Intertrust has predicted positive news heading beyond the Brexit leave date of 29 March, in that 67% of real estate professionals expected the volume of Asian real estate investor capital to increase over the course of 2018 and 2019. The Intertrust report found that even the ongoing political uncertainty was unlikely to knock the UK off the European top spot so far as the flow of Asian capital into property was concerned. 56% of those surveyed believe that the UK was likely to see larger increases in Asian capital flows than any other European nation.

“Property investment UK opportunities continue to attract East Asian investors in high numbers for a range of reasons. For those in Hong Kong, for example, UK property offers excellent value for money. For Chinese investors, it’s a way of taking money out of the country, where capital controls are in place. The motivations are varied but the result is the same, so far as the UK is concerned – a thriving property investment market that enjoys a healthy flow of capital from Asia.”

Jonathan Stephens, MD, Surrenden Invest

China and Hong Kong are the biggest fans of UK property

2018 figures certainly reflect this, with the Far East behind the lion’s share of overseas investment during the last quarter of 2018 – accounting for £4.8 billion of the quarter’s total of £8.1 billion worth of overseas investment. That £8.1 billion is 16% higher than the five-year quarterly average, while investment from overseas over the whole of 2018 stood at £27.9 billion – 33% above the 10-year annual average.
Surrenden Invest East Asian Investors
Investors from China and Hong Kong are the biggest fans of UK property, so far as total amounts invested are concerned, though Singaporeans, South Koreans and Malaysians are also keen to enjoy all the benefits of working with UK property investment companies. When it comes to buy to let accommodation, those benefits include stead, solid returns and superb capital growth potential. That real estate “has provided more stable returns over the past decade while also being less volatile, which is strengthening investor appetite” is a key reason for the sustained level of interest, according to Rob Blain, executive chairman of CBRE Asia Pacific.
London, of course, is popular with overseas investors. It is the UK’s most well-known city and a capital that carries a certain amount of prestige as a place to own property. As a result, it has been the UK’s top city for cross-border investment for all but one of the past ten years, with Asian capital playing an essential role in it maintaining this position. However, it is far from the only urban centre in the UK that is attracting attention. Birmingham, Manchester, Liverpool and Newcastle have all come increasingly under overseas investors’ radar over the past few years.

“The conversation used to start and end with London, just a few years ago, when it came to overseas investors considering where to buy property. Now, regional cities are big news with East Asian investors, as they usually offer better value for money and healthier returns than property investment opportunities in London.”

Jonathan Stephens, MD, Surrenden Invest

Key hub for regeneration activity

The UK’s second city, Birmingham, certainly has much to appeal to Asian investors. It is known for its outstanding shopping and dining scene, with centres such as the Bullring, Grand Central, the Cube and the Mailbox all making names for themselves. It is also a dynamic business centre and a key hub for regeneration activity, with all the associated benefits that such work can provide to those who invest in the right areas.
The B1 postcode zone is just such an area. Apartments at No. 76 Holloway Head, B1, for example, are surrounded by those iconic retail and gastronomic destinations, as well as being just a two-minute walk from New Street Station – the UK’s busiest railway station outside of London. They are at the heart of the city centre, with regeneration work underway all around them, which is set to impact positively on the inner city zone for years to come.
Such long-term credentials mean that Birmingham, along with other UK cities, will remain firmly in Asian investors’ sights over at least the next five to ten years, irrespective of the UK’s political and economic wrangling with the EU.

For regular updates on investing in top UK regional cities, follow the Surrenden Invest team on social media.

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