New reports show that more American investors are investing in the UK commercial property market. What sectors are they investing in, and what opportunities does this provide UK investors?
In 2024, American investors poured £13.6bn into the UK’s commercial property market, doubling their investment from 2023 and accounting for a record 33% share of investment in the UK.
The report, collated by the British Property Federation and CoStar Group, found that American investors have bought £49.7bn worth of UK commercial properties over the past four years, more than any other country investing in the UK.
What property types are American investors focusing on?
In 2024, hotels and mixed-use portfolios were overseas investors' most popular investment types. However, after years of remote working reducing demand for office spaces, we saw a positive uptick in large transactions in London’s West End, indicating a renewed interest in prime offices.
Where are they investing?
London remains the most popular region for investors, but we saw other areas closely behind.
While the Southeast continues to draw investment from overseas, the rise in the Build-to-Rent sector and increasing demand for student housing have driven investment in the Northwest.
Outside London and the Southeast, the Northwest and the West Midlands have become much more popular over the past few years.
What about UK property investors?
However, we didn't just see an increase in investments from overseas. The CBRE UK Real Estate Investment Figures for Q4 2024 reveal a remarkable £16.8bn growth in investment, a 63% year-on-year increase. Local investors account for 56% of the transactions, reflecting a 20% rise compared to 2023.
Furthermore, the report shows a strong appetite among commercial investors, with 73% planning to acquire more investments in 2025 and 25% aiming to maintain their 2024 investment levels.
This may be attributed to the significant Stamp Duty cost increases for residential property, which make commercial and semi-commercial properties more appealing to property investors.
UK investment by sector
The CBRE report echoes the British Property Federation and CoStar Group’s findings, with the Living and Office sectors attracting the most investment annually, at £10.4bn and £9.2bn, respectively.
What this means for you
With commercial property investment set to rise in 2025, both reports highlight the growth opportunities to explore.
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