According to the results of a new research, the London property market slid down from number one to number three on the index of the most invested-in property markets in the world.
The latest world rankings put property investment in London behind New York and Los Angeles, just as total investments in real estate across the globe dipped for the first time in New York.
London has slipped from its position as the most invested-in property market to be overtaken by New York, as total investment in buildings across the globe fell for the first time in seven years.
Property advisory firm, Cushman & Wakefield, conducted the study, and stated that property investments in London dropped from a previous value of $39bnin 2015 to $25bn as at June 2016, pushing it to third on the rating of the most preferred property investment destination in the world.
It said despite growing by 0.5pc to a value of $1.35tn in the past year, excluding land purchases for development, the global investment market dwindled by 5.7pc to record $919.7bn in total investment as property investors reacted to political and economic uncertainties around the world.
Although the global investment market grew by 0.5pc to $1.35tn in the 12 months to June 2016, when transactions to buy land for development were excluded, the market actually shrank by 5.7pc to $919.7bn as investors reacted to greater volatility and political and economic uncertainty.
The advisory firm stated that with the level of change anticipated in the macro environment such as the Middle East crisis, to Brexit and a Donald Trump presidency in the Unites States, a good number of investors are struggling to predict the market and where they would find value.
Relative normality
The report also shows that property investment in London has remained relatively stable, when viewed against initial fears about how the Brexit vote would impact on the UK property market, even though London’s property market felt the aftershock of UKvoter’s landmark decision on June 23 to exit the EU.
Investors had instructed their agents to put negotiations to buy prime properties on hold, financial services firms on the search for new office spaces halted their hunt, and developers across the UK’s capital froze new planned projects, while prospective tenants began to reconsider if they really needed to relocate homes. That early panic forced property funding companies holding assets valued at £15bn to close the gate on the rush to redemptions by anxious investors, echoing the property crash thatfollowed the credit crunch crisis of 2008-09.
It would now seem that the Brexit vote has not had any negative impacts on the market as some had forecasted. Cushman & Wakefield said although the Brexit vote disrupted a third of planned commercial property investments at the time, property investment in London recorded a higher number of completed deals compared to other UK regions.
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