According to JLL, real estate experts believe that Asian investors are increasingly likely to move into regional English cities and away from London. This is due to potentially higher returns when compared to London properties and Asian investors’ desire to diversify their UK real estate portfolios.
Asian investors have already starting to acquire assets in the northern cities of England and the trend looks set to continue. In 2014, direct real estate investment into UK regions rose 70 percent year-on-year to GBP28 billion, according to JLL research.
A consortium of Singaporean investors led by boutique developer Heeton Holdings purchased a major development site in the centre of Leeds. The deal, brokered by JLL, was the second UK investment the consortium has made in the past four months.
“This site will be a great addition to the consortium’s land bank. According to our studies, the current residential demand in the area outstrips the supply with a 99 per cent occupancy rate,” Vince Toh, chief executive of Heeton, said.
Chinese groups are also looking towards the north of England. Beijing Construction Engineering Group and its UK partners invested in the GBP800 million redevelopment of Manchester Airport.
These transactions underscore new Asian capital targeting opportunities in the north of England cities, Alistair Meadows, head of JLL’s International Capital Group in Asia Pacific, pointed out.
“London has and will continue to be a focal point for Asian capital given its global status, economic and population growth and depth of opportunities. But investors should now consider what’s next for their UK real estate investments,” he added.
UK Prime Minster, David Cameron’s, recently visited Southeast Asia in an attempt to raise awareness of investment opportunities beyond London. The idea is to support growth and boost the economic status of northern cities, including Liverpool, Manchester and Leeds, collective dubbed “Northern Powerhouse” cities.
“We believe the timing is right to consider the “Northern Powerhouse” cities,” Matthew Richards, head of JLL’s International Capital Group in EMEA, said. “Economic growth, central and local government co-operation and significant mixed use regeneration sites offer attractive opportunities for Asian investors and developers.”
