Foreign buyers cause London commercial property investment to boom

A new report has revealed that commercial property investment activity in London has boomed over the last few months due to rising levels of interest from international buyers.

According to CB Richard Ellis, strong demand resulted in central London investment volumes increasing significantly during the second quarter of 2010, which saw turnover rise by 57 per cent to reach £1.9 billion.

Foreign buyers 'remain very active' in the UK, says the company, and were responsible for 62 per cent of total investment volume during the quarter. The most active were German investors, who accounted for 11 per cent of investments.

While investors from Germany were most active overall, Middle Eastern buyers now own the largest share of the central London commercial market – 45 per cent - following the purchase of the Knightsbridge Estate.

By comparison, UK property firms and institutions accounted for 19 per cent and 14 per cent of investments during the period.

Meanwhile, UK-based firms have also been snapping up commercial property in London – fund manager Legal & General has purchased an Islington building from a private foreign investor.

The purchase of the multi-let commercial asset, located at 1-7 Upper Street and 2-10 Liverpool, was made on behalf of its property unit trust for £16.5 million.

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