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Overseas investors have for the first time overtaken UK institutions to become the largest owners of UK commercial property, new data shows. The value of portfolios held by overseas owners has more than doubled, up by 129%, over the last decade to £94 billion, according to the Property Industry Alliance. The increase means that overseas investors now own almost a quarter, 24%, of all commercial property investment in the UK, the Property Data Report 2014 shows, with three quarters of this investment in London. By contrast the total owned by UK institutions fell by 16% over the decade to £75 billion, representing just under one fifth of the £385 billion invested in commercial buildings. ‘The annual Property Data Report is an invaluable resource which sets out clearly key facts about commercial property and shows the crucial role it plays in the UK’s economy,’ said Sir Robert Finch, chairman of the Property Industry Alliance. ‘Aside from its contribution to the economy, which the report shows to be sizeable, the commercial property industry is also a platform for virtually all the country’s other major industries and a significant contributor to the financing of retirement. Its attractiveness to investors from both the UK and overseas is therefore to be welcomed,’ he added. The research also reveals that average rental increases over the last 10 years in the office sector of 1.1% and 0.5% in the retail sector have increased at a much slower rate than other business costs, and well below the rate of retail price inflation of 3.3%. Drawing on recent work by the Investment Property Forum, the report highlighted that of the £683 billion total UK commercial stock, retail is the largest sector by value at £305 billion, followed by offices at £195 billion and then industrial property at £126 billion. Other commercial property, including hotels and leisure, was valued at £58 billion. Continue reading →
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