Overseas investors bought most of UK commercial property during downturn

KUALA LUMPUR: Overseas investors dominated the UK’s property scene, accounting for 34% of all UK commercial property purchases during the financial crisis which began in the fourth quarter of 2007, according to information released by Property Data, an independent market data specialist for the UK.

Knight Frank’s Head of Commercial Research, Claire Higgins who, analysed the data said: “The next largest investor group was UK institutions, which purchased 20% of the total.”

The data also showed that UK institutions seemed to be returning and have outstripped overseas buyers for commercial properties, accounting for 37% of all transactions in the fourth quarter of 2009.

“Assuming they can continue to find anything to buy [a pretty big assumption], it’s fair to say the UK institutions are back,” Higgins added in his analysis of the data.

Overseas investors would have likely taken advantage of weaker property prices during the financial crisis, which was started by the subprime mortgage crisis in the US and affected the western developed economies especially badly.

The report did not show the exact source of these funds entering the UK.

Property transactions last year totalled about £21.7 billion (RM119.3 billion), which was about the same as in 2008.

Commenting on UK’s economy, Knight Frank added that “2009 will undoubtedly be the worst on record in terms of economic performance”.