Middle Eastern investors drive office demand

 
Kasmira Jefford
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A WAVE of new investors from the Middle East and Far East seeking a safe haven for their cash are helping to fuel demand for London office properties, according to new research by BNP Paribas.

The French bank’s property arm said overseas investors made up 61 per cent of London office investment in the third quarter.

While some overseas investors have been in the UK market for several decades, BNP said it has seen an increase in new entrants making their first investments in the UK.

“Diversification is a major driver, as investors seek assets outside their home country, but the UK is also benefiting from a preference for sterling investments, as investors wait to see stability in the Eurozone before investing there,” Andrew Cruickshank, international investment director at BNP Paribas Real Estate, said.

Middle Eastern investors, who traditionally prefer outright ownership, are also opting for leaseholds for the first time, the bank said.

Investment into the City from foreign buyers fell in the third quarter to 86 per cent compared with 90 per cent in the second quarter but was still up slightly from 85 per cent in the second half of last year.