Richard Carr comments on recent reports, which suggest that Asian investors are increasingly expressing interest in the British property market. Asian investor interest, these reports indicate, has climbed in the wake of Brexit.
Before the referendum, many experts raised fears that Brexit would dampen UK real estate sector activity. However, recent research indicates that the number of residential properties advertised for sale in the UK rose following Brexit, while average British house prices decreased by 0.2% on average. Meanwhile, mortgage availability remains mostly unchanged after the vote.
However, the value of the British Pound has fallen by 14% since the vote to leave the EU. But this holds potential economic benefits for the country, especially for businesses which export goods and services from other nations, as this means it is now cheaper for them to do business. Furthermore, industry portal Select Property writes that Asian companies are also looking to capitalise on the lower pound.
Asian interest rises
Reports indicate that since Brexit, a number of Thai-based firms have decided to invest in UK real estate, while prices sit below market value. Meanwhile, a range of Chinese newspapers report that following the Brexit result, there have already been eight major Chinese investments in UK property.
CBRE Asia-Pacific’s Head of Research, Henry Chin said: “We have seen an increase in inbound inquiries since the Brexit vote, especially from Asian high-net-worth individuals and family offices, who still see London as a safe destination for property investments.”
Furthermore, Knight Frank Thailand’s Managing Director Phanom Kanjanathiemthao noted that due to this “currency window,” now is a great time for Asian investors to enter the British real estate sector.
Entering the UK
But it is not just Asian firms which are currently expressing interest in UK property. Recently Deka, a German bank, have devoted £164m to buying property in Northern British powerhouse Manchester. Property Wire notes that Manchester is increasingly becoming a key city of commercial property investors, with office transaction volumes increasing by 8% during the opening six months of 2016.
Deka were advised on this deal by Bilfinger GVA. Mark Rawstron, a Bilfinger GVA Regional Director argued that Manchester is fast becoming attractive to foreign investors, due to high rates of growth, a rapidly rising population and structural under-supply of real estate.
Explaining, Rawstron said: “When a German investor like Deka says they regard Manchester as the strongest market outside London they are not saying it to flatter us – they put it in their statement to German investors because it’s true.”
Strong national market
The UK’s property market possesses the capability to attract investors, whatever the circumstances, due to its strong growth potential. For example, a recent study conducted by CBRE indicates that robust fundamentals will support expansion of the UK’s residential property sector during the remainder of 2016. It is clear that in light of Brexit, investors from all over the world are finding new ways to enter and profit from the UK’s strong national property sector.