IRELAND has overtaken the United States as the single largest cross-border investor into UK commercial property – accounting for almost 22% of total overseas purchases in 2005.
According to a report from chartered surveyors DTZ, called Overseas Acquisitions into UK Commercial Property, Â£12.3bn was invested in UK commercial property from overseas investors in 2005 – representing a fall on 2004.
In real terms, however, 2005 saw an increase of 9% on 2004, if the large corporate transactions, including the Â£5.1bn Songbird purchase of Canary Wharf, are ignored.
The strong volumes of purchasing activity indicate that non-domestic investors remain a key participant in the UK real estate investment market, accounting for around a quarter of total purchases overall.
The lion’s share of overseas investment is dominated by five sources: Irish, US, Middle East, German and Dutch capital.Irish investors represented the largest single source of cross-border capital into the UK with more than Â£2.7bn of purchases in 2005 – this figure mirrors the levels achieved in 2004 which stood at Â£2.8bn.
In keeping with historic trends, around 75% of this activity was attributed to private investors.
US investors were the second largest with around Â£2.6bn of acquisitions with German third with Â£2.2bn.
The Dutch were ranked fourth and Middle Eastern fifth with total purchases of Â£1.4bn and Â£1.3bn respectively.
Dan Griffiths, head of investment at DTZ’s Cardiff office, said, “Whilst some Irish investors are looking elsewhere for commercial property investments due to the recent movement in yields, overall there appears to be little sign of a fall-off in demand from Irish investors who are looking to take advantage the growth prospects for the UK.
“The drivers for this demand continue to include the positive rental growth story.
“There is a lack of available product in the Irish market, there is available finance from Irish lending insti-tutions for UK property transactions and it is a familiar market.”