Weak sterling draws surge of foreign investment
If sterling continues at a similar rate since the referendum, the UK will continue to see sustained interest from Asia Pacific investors, JLL reveals. The depreciation of the pound, coupled with a slight drop in capital values, has led UK commercial real estate to be discounted by 16% on average to overseas capital, according to property firm JLL.
As Theresa May triggers Article 50, to start the process of withdrawing from the EU, JLL findings highlight that the depreciation has spurred increased investment in the UK from the Middle East and Asia Pacific regions even though the market has experienced less capital inflow from the United States and global funds. Although currency movements have not had a strong historic correlation with overall international capital inflow into the UK, they are part of the reason why the market has experienced a recent surge in demand from buyers from the Middle East and the Asia Pacific region, headlined by Hong Kong and mainland China.