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Wealthy Asians eye London market
Publication Date : 22-09-2012
Wealthy Asians are seen as a leading source of capital flowing into London's commercial real-estate market, according to Alistair Meadows, head of Asia Pacific International Capital Group at Jones Lang LaSalle.
Asian investors have been increasing their investment in central London, especially in the commercial real-estate market, according to the firm. It is reported that the percentage of Asian investors increased from 6 per cent in 2010 to more than 20 per cent in the first half of 2012.
There has been a surge in the inflow of Asian capital in the past 12 months, Meadows said.
Asian investors who are attracted to London commercial real estate ranged from sovereign wealth funds such as employees' pension funds from Malaysia to wealthy investors from China, Indonesia and Thailand, he said.
The London property market is attractive for several reasons. Besides being a mature market, it offers good risk-adjusted returns in the office, retail and residential sectors. No restriction on foreign ownership is another attractive feature for investors.
The firm expects to see continued increase in demand from Asian buyers in the central London office market, Meadows said.
It is expected that there will be an increase in Asian investors venturing into London's hotel and residential markets as buyers of individual residential units through to residential investment blocs and major hotel deals in London's glitzy West End.
Jones Lang LaSalle is among many foreign firms promoting overseas investment after the Thai government's recent incentives on investing abroad. The move aims to encourage Thais to invest overseas in an effort to soften the baht currency.
Regarding the euro-zone crisis, the negative effects are less prominent in the United Kingdom, which is not part of the zone, clinging to its pound sterling. As a mature market, property prices are relatively stable when compared with other European real-estate markets.
Greece, Spain and Italy are among the major European economies hit hard by the sovereign debt crisis, which has threatened the viability of the single currency, while the UK is a member of the 27-country European Union, but not a member of the euro, which is used in 17 European nations.
To solve the crisis in the long run, there have been proposals for fiscal and banking unions among all the member economies of the euro zone because the current monetary union alone is not viable.