London Prime Property
London has once again been re instated as the number one destination for investors looking for a luxury property investment. This is attributed to a combination of a weaker pound coupled with the ever growing reputation of London as a financial centre for the world.
Most of the prime residential properties are purchased by buyers from all over the world, countries such as the Middle East and North Africa, the Far East, Greece and Italy, countries experiencing instability, corruption and inequality. Most recently London has seen an increase of French investment in the luxury property sector from investors unhappy with the political instability and extreme taxation introduced by the present French government.
Investors from the BRIC nations of Russia, India and China are some of the biggest investors in London's luxury property market, together with Middle Eastern investors who view London as a secure place to invest. The growing influence of wealthy Indian investors accounts for nearly 10 percent of all buyers in the £5 to £15 million luxury property bracket. Most recently a Mumbai based property company beat off several rivals including bidders from the Middle East, Asia and Russia to purchase the Canadian High Commission in Grosvenor Square for £306 million with the intention of refurbishing the building into luxury high end apartments with a value of over £1 billion.
Middle Eastern investors primarily from the Gulf states have tripled their share of investment in UK residential and commercial property in the past 5 years, spending £1.48 billion last year, representing 16% of all foreign investment in this sector.
The Qatari monarch, who owns one third of the world's natural gas reserves, is 5 times richer than the Queen. In recent times he has been using considerable quantities of that wealth to buy up trophy property assets in London. The Qataris acquired the US embassy in Grosvenor Square for £449m at the end of 2010 with plans to transform it into a luxury hotel and apartments.
Coupled with a strong domestic market, the sale of houses worth in excess of £5 million doubled in the first quarter of 2012 to a total of £723 million with demand pushing prices up by a further 15% in 2013 with London showing an annual investment of almost £3 billion in luxury property from overseas investors. With ever increasing interest shown from emerging markets such as China, these figures could be set to increase. Reports in the last quarter of 2013 have shown overseas investors to be responsible for over half of all central London property purchases.