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UK Property Sees Record Investment

LONDON-Net investment in UK commercial property reached a record high in 2000 according to the latest 'Money into Property' report from DTZ Research. Institutions, overseas investors and debt-driven investment played major roles.

By Graham Parker | Updated on June 18, 2001

LONDON-Net investment in UK commercial property reached a record high of £29.7 billion ($41.25 billion) in 2000 according to the latest ‘Money into Property’ report from DTZ Research.Total investment was up two-thirds on 1999 and the agents said the record was due to unprecedented demand from institutional and overseas investors and particularly high levels of debt-driven investment. However, DTZ Research is predicting capital inflows will fall in 2001 to about £20 billion ($27.8 billion).

Overseas investors accounted for more than 25% of all commercial property investment transactions of over £1 million ($1.39 million) in 2000 and DTZ anticipates they will retain this market share, with around £5 billion ($7 billion) of purchases this year with US investors dominating activity.

UK pensions funds committed £3.7 billion ($5.1 billion) to commercial property in 2000, and DTZ’s survey shows property fund managers expect property to outperform other asset classes again in 2001 with returns expected of around 9.6% against 7.4% from equities and 6% from government bonds.

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