In recent years, London has stood out from the rest, offering the perfect opportunity for real estate investors to build their property portfolio. As a result of this, it has generated around $87 billion, which is much more than other cities in the world. Due to this, investors continue to see it as an opportunity to help grow their portfolio and invest in more estate in the capital of England.
The UK property is very impressive, even in areas such as Birmingham and Manchester however, it cannot compete with the likes of London which also blew Hong Kong and New York out of the water. The UK’s real estate market is one that everyone should be getting involved with as it offers the best returns.
As a result of London’s success, the UK received a total of $155 billion in investment, which puts it second behind the US. These numbers are incredible for the size of the UK. The question is, why is the UK receiving so much property investment, especially London.
Why Real Estate Investors Are Choosing London Over Other International Cities
London has continued to be ranked the number one city in the world, which is one of the reasons why it may be so appealing to investors. That being said, this isn’t the core reason why investors are so attracted to this city. One of the reasons for this is because of the low interest rates in comparison to other cities. To add to this, a JLL report said that $1.5 trillion was allocated to the commercial sector.
Why Trophy Assets Still Command Premiums
This year, Prada made the headlines because they bought property in Central London, which is the home to Miu Miu’s flagship store. This was roughly £250 million, which indicates real estate investors are still looking to purchase premium property. This report also shows the types of investments and the majority of those investments are in offices at 31%. This is then followed by residential (24%), retail (19%), industrial (12%) and hotels(11%).
As you can see, the majority of investors are spending their money on offices due to the return. This is because offices offer the best rental returns and in central locations, the environmental ratings perform the best. The older the buildings are, the more difficult they tend to be when it comes to selling. This is because modern buildings are more eco-conscious, which is what the world is moving towards. The greener the asset is, the more valuable it is.
Why Invest In London?
Property investment might not be appealing to everyone but when you mention London, there is always a lot of interest. That being said, it only attracts the richest property investors due to how expensive the market is. That being said, it does offer some great positives.
London Rent Offers Great Returns
One of the reasons why investors consider real estate in London is due to the returns through rental income. This is only with commercial properties and they average roughly £2190 per month. Compared to the rest of the UK, it is 292% higher than the others. So this is why investors sway towards London over anywhere else, because of the high rental income which they can receive on commercial property.
The Place To Be For Commercial Real Estate
London is constantly growing, which is why many people are interested in London for commercial real estate. That being said, for residential properties, this isn’t something that investors are interested in.
London attracts many businesses from all over the world, including high-end restaurants and hotels. This is what makes it the number one spot for real estate investors. International investors is what sets London apart from other major cities in the world. In 2023, around 61% of the £11.2 billion that was invested in London came from international investors showing the pull that the capital has.
A Massive Regeneration Project
Since the Olympics, there has been a lot of investment from the government to improve the capital. There have been a number of internal projects to help rejuvenate London and keep it up with the rest of the world in terms of technology, sustainability and the overall luxurious feel of it.
To Conclude
As you can see, London is growing and continuing to grow. It is no surprise that there are so many international investors who are interested in the capital. It isn’t just about the returns in the present; it is also the returns in the long-term future, and London can certainly offer both. This is great for the UK economy because of the international business they are receiving. Furthermore, as the real estate market continues to grow, this also benefits the real estate industry. This is shown through large-scale projects, but also a constant demand for equipment rentals during the construction project. This includes the essentials such as scissor lift hire, crane hire, and even smaller items such as drills and other tools. All of this supports interior fit-outs, high-level maintenance and overall renovations.
