London Commercial Property Beats Rest of U.K.

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Central London's commercial property attracted more investors in 2012 than the rest of the U.K. for the first time, according to DTZ. 

Commercial property investments in the U.K. capital last year totaled a record 16.1 billion pounds ($25 billion), a 48 percent increase from the previous year. The total represented more than half of the 32 billion pounds invested in the rest of the country, the consultancy reports.

Foreign investors led the interest in London. Foreign investors purchased 16 billion pounds of U.K. commercial property last year, a 61 percent increase from 2011.

"The surge in investment activity in central London can be linked to very strong demand for prime U.K. assets from foreign investors...London offers large lot sizes and liquidity," Ben Burston, head of U.K. Research at DTZ, said in a report.

The U.K. property market is still recovering from the recession and mostly full of uncertainty for analysts. 

London, however, is viewed as favorable in a time when many markets continue to be risky. And Europe in general is attracting more commercial property investors.

''We highlight the U.K. alongside the U.S., Germany, China and Japan as especially attractive to international investors,'' DTZ research global head Hans Vrensen said in a statement.
The liquidity of the market is one of the major appeals, he said.

"If you cannot buy into and then later sell out of a market, relative value is immaterial," Mr. Vrensen said.