The majority of overseas high net worth individuals pinpoint London real estate as their top target investment class, according to the inaugural International Private Capital Survey from property consultant Cluttons, in association with VPC Asia Pacific.
- Further reading: Prime London Market Report
Fifty-seven per cent of millionaires in cities including Kuala Lumpur, Manama, Singapore, Bangkok, Jakarta, Tokyo and Dubai said that the UK capital was their top investment target.
Cluttons said the survey tracks current sentiment from VPC Asia Pacific agents acting for high net worth individuals across the region’s main private capital hubs including Bangkok, Jakarta, Singapore and Kuala Lumpur. The agents interviewed in each office base gave their view on the attitude of their HNW clients and their current investment intentions.
The rapid recovery of central London residential property after the global credit crunch has been a key factor influencing investment decisions, as investors seek strong capital growth.
London was not the top pick for everyone, although it always ranked highly. Investors from Dubai and Manama, Kuala Lumpur and Singapore identified London as their first choice city, but HNW individuals in Bangkok ranked London behind Yangon in Myanmar, while Indonesian wealthy private investors were still looking to Singaporean and Australian residential before considering London.
Forty-three per cent of the investors stated that the global financial crisis has had no impact on their view of London as a top investment target location. Almost a third (29 per cent) claimed that London is better placed because of the eurozone difficulties.
“The fundamentals of the London economy remain strong; the city attracts dynamic businesses and skilled professionals from around the globe,” said James Wong, managing director, VPC Asia Pacific in association with Cluttons. “This gravity effect underpins the city’s appeal to wealthy individuals looking for investment opportunities in the next 12 months.”
Global appetite for both London residential and commercial real estate assets has seen an upturn in the last 12 months, with overseas investors (both institutional and individual) contributing almost 90 per cent in recent commercial asset transactions, said the survey.
However, headline reports of “safe haven London throughout the global economic crisis, although not inaccurate, should not be overplayed,” said the survey. According to Cluttons, 86 per cent of HNW individuals pinpointing London as their top investment city already have strong ties to the UK, whether through second homes, children’s education or the expansion of an existing investment portfolio; London has always been a solid investment choice.
“Cluttons’ global view is that there remains no room for complacency,” said Wong. “Private Real Estate HNW Investors in Dubai felt there would be less outflows of capital from the United Arab Emirates over the next 12 to 18 months as the UAE’s economic recovery gains momentum. Furthermore, the bulk of Asia-Pacific HNW individuals increasingly are expected to look at their home markets more favourably.”
Seventy-one per cent of HNW individuals surveyed said they were planning investment activity in the next three to six months in their first choice target city. And at over two-thirds higher than last year, investors stated that the target city will be outside their domestic market.
