Auctions Boosted By Foreign Investment - 16/03/11
Experts are reporting an increase in East Asian investors snapping up commercial property in auction rooms across the country.
East Asian investors are the biggest spenders with more than £52bn of Asian equity seeking acquisition in the UK commercial property market.* Buyers from Indonesia, Thailand, Taiwan and China are the latest to target commercial property deals.
Auction funding specialist Auction Finance Limited, which attends auctions across the UK, is reporting an increase in activity from East Asian investors bidding at auction.
Chris Baguley, director of Auction Finance Limited, said:
"All the latest statistics suggest we are starting to return to normal conditions following the recession. The value of commercial property is set to rise this year, not just in London but across the UK. There's still a lack of new properties being built and therefore properties that come up at auction are being snapped up.
"I expect we'll see more cash rich investors in the auction rooms securing property. As demand grows, this will lead to an increase in price, so savvy investors are securing commercial properties now. With increasing rental yields, there is money to be made on the right properties. It's not surprising that foreign investors are seeing the potential."
Savills recently reported their first auction of the year raised a total of £30.42m and the latest CB Richard Ellis figures show commercial property total returns of 0.8 per cent and capital growth of 0.3 per cent.
Last year transaction volumes reached £5bn in the West End and the same value in the City, with foreign investments accounting for 63 per cent of the activity.
According to the Essential Information Group, which provides auction industry statistics, auction figures show that on a year by year basis, the lots offered was up 8.3 per cent.
* Figures from Jones Lang LaSalle
