According to commercial insurer, Royal and SunAlliance’s (R&SA) new report UK for Sale - Global Investment in UK Commercial Property, a third of the UK’s commercial building stock is owned by foreign investors.

Overseas-based investors directly own nearly a quarter (22%) of all commercial buildings in the UK and an additional 10% through investment funds. In contrast, overseas companies with a physical presence in the UK own just 1% of the UK’s commercial buildings. The report also found that investment in UK commercial property has grown by one third over the past seven years, with the market seen as offering a steady return on investment.

Between 2000-2006, the total value of commercial buildings increased by 23.6% to £741bn, while around £21.7bn of commercial stock is estimated to have been under construction between 2006 and 2007, reflecting continued confidence in the UK economy. New orders for commercial construction amounted to £16.6bn in 2006 alone.
Nigel Salisbury of R&SA said: “The robust nature of London’s market in particular has made it especially popular with investors, who have always seen the capital as a safe destination for their money, capable of generating steady returns.

“Over time, we expect to see increasing competition from emerging markets such as Eastern Europe and in due course, further afield in China and India, as people become increasingly confident about investing in these rapidly expanding economies. However, in the long run we believe the outlook for the UK remains healthy, so long as the economy also continues to stay in reasonable shape.”