JLL predicts ongoing interest from Asia Pacific investors if sterling continues at a similar rate since referendum.
As Theresa May triggers Article 50 to start the process of withdrawing from the EU, the depreciation of the pound has spurred increased investment in the UK from Asia Pacific, according to real estate firm JLL.
The depreciation, coupled with a slight drop in capital values, has led UK commercial real estate to be discounted by 16 percent on average to overseas capital relative to pricing since the June 2016 vote, says JLL.
Although currency movements have not had a strong historic correlation with overall international capital inflow into the UK, they are part of the reason why the market has experienced a recent surge in demand from buyers from the Asia Pacific region, headlined by Hong Kong and mainland China.
“We continue to see the emergence of Chinese capital globally. Chinese investors now rank just behind US as the second largest source of global cross border capital and we expect them to have an increasing influence on the UK market,” says Alistair Meadows, Head of UK Capital Markets at JLL.
“Many investors from China and the wider Asia Pacific region are attracted to the depth, liquidity and familiarity of the UK market and come seeking diversification and safe haven forms of investment.”
Stuart Crow, Head of Asia Pacific Capital Markets, says: “Private investors have responded to the depreciation quickly and, as a result, they have become a more important driver of market sentiment and pricing. Despite the triggering of Article 50, as 2017 progresses we expect global funds and institutions to return their focus to the UK, in…
