French people are snapping up UK commercial property
Commercial property in London is continuing to attract interest from investors based outside the UK, a new report has revealed.
According to Knight Frank, the city is proving especially popular with investors from the US and France.
Indeed, head of corporate services Jemma Scott said demand among prospective occupiers in these two countries was "particularly strong" during the three months to June 2012.
This was attributed partly to the fact that London was gearing up to host the Olympic Games during this period, as corporate tenants believed it would be a good idea to "arrive early to secure the best properties".
Nevertheless, the rate of rental growth in the prime London market is starting to slow down. While the city has long been regarded as a safe haven for investors throughout the global financial crisis and the ongoing turmoil in the eurozone, some might view this as a sign that it is not immune from economic developments both globally and domestically.
"London's current weakness in headline rents is not due to a wider downturn in demand from tenants," Ms Scott commented.
"Instead, affordability constraints and the weaker performance of London's economy are limiting the scope for rental growth."
Figures from Knight Frank showed that emerging markets are actually seeing the strongest levels of rental growth this year, with Nairobi, Tel Aviv and Guangzhou doing particularly well during the second quarter of 2012.
Despite this, the organisation pointed out that prime rents in London are 25.7 per cent higher than they had been during the worst point of the recession, which illustrates the extent to which it has been able to withstand the economic slump.
This comes after Knight Frank revealed nearly nine out of ten sales of central London offices between April and June 2012 were to investors based outside the UK. Many of the foreign purchasers were found to be from countries including the US, Russia, China and Brazil.