The “high risk” Eastern European investment market is fast catching up with the UK as the most attractive commercial property market.
Research commissioned by UK Trade & Investment, being launched at MIPIM next week, found that 38% of property professionals ranked Eastern Europe as their top destination for commercial property investment.
Despite the growing interest in the region, many still considered it “high risk” however.
Peter McDermott, UKTI’s Inward Investment marketing director, said: “The UK is strong but the survey results show the prospects for the future and Eastern and Central Europe are both getting stronger, as are parts of Asia Pacific where property development is raging.”
“But we do not see that this investment is going to be at the expense of the UK,” he said.
“The UK is a major global business hub and in terms of office accommodation there will be continuing demand for new office accommodation, particularly to service the needs of the service sector.”
The UK remained the most attractive market in Europe for investors, with 43% ranking it as the top destination.
Two-thirds of respondents said the country’s stable and resilient property sector was the key factor influencing their decision to invest in the UK.
More than 40% said the stability provided by long lease periods was a strength, while 34% said access to low-cost finance was a major attracting factor.
Although just over half of respondent predicted that overseas investment in UK commercial property would increase over the next two years, a quarter thought it would remain static.
UKTI surveyed 100 senior executives involved in the UK property industry, including developers, investors, advisers, lawyers, bankers and accountants.
References: EGi News 17/03/06
