US investors are snapping up London’s commercial real estate at the fastest pace in eight years, as they become tempted by signs the UK property market is recovering faster than in the States.
In the first three months of 2024, some £1.9 billion was spent by US-based investors in commercial property deals in the capital, BNP Paribas Real Estate data revealed.
Throughout the whole of Britain, investors from across the pond spent £3.1 billion on property during the first quarter, a nearly 66% year-on-year increase.
Both sales and valuations of commercial properties across the globe have come under pressure in recent years as the effects of a switch to hybrid working and higher interest rates are felt.
Now, BNP Paribas’s real estate division believes interest from the US in British property is picking up due to more enticing “leasing fundamentals” and a stronger dollar compared to the pound.
It argued Stateside investors had been moving away from domestic property markets due to the continued elevation of interest rates, the slower returns to offices and the uncertainty surrounding the upcoming election.
"This positive uplift into this new cycle tells us US capital is firmly back in the market," said Fergus Keane at BNP Paribas Real Estate.
Examples of deals include the BT Tower being bought by MCR Hotels for £275 million and Elliot Management and Oval Real Estate’s £300 million purchase of a mixed-use portfolio in the West End.