Danish investors are racing to snap up UK property before Christmas in a bid to escape high taxes in Denmark.
Retail agents are seeing a flurry of activity in the small lots market, with multiple bids for lot sizes between £2m and £15m. Partner at Healey & Baker, David Erwin, said: “We’ve had an astronomical amount of interest from Danish investors over the last few weeks.”
Peter Winthur, director at Danish agency Sadalan Albaeck, explained: “Investing in commercial property is the only way you can get full deduction of tax, with 5% annual depreciation on the value of the building over 20 years.
“Theoretically this applies to investments across Europe, but the UK is particularly attractive due to its traditionally long leases.”
Recent weeks have seen Legal & General sell a shop unit let to Boots in Torquay to Danish consortium ESL for £3m, as well as Liverpool Victoria’s sale of its House of Fraser store in Doncaster to a Danish private individual for £4m.
Danish investors have also flocked to bid on six shops put up for sale by Coal Pension Properties, in lot sizes of £2-6m, and a BHS store in Southport, Lancashire, which is valued at just under £6m.
Eric Haywood, head of Pentstone, a UK company dedicated to finding investments for Danes, said: “These are not principally property investors, but individuals who want to buy into a tax-efficient rental scheme.”
Pentstone currently has around £15m of deals in solicitors’ hands for Danish clients, including a £5m Sainsbury’s store in Bristol, a £7m Hampshire industrial estate, and a £1.5m shop unit in Burnley, Lancashire.
Such investment appears to be on the up as interest rates fall. Head of investment at Jones Lang LaSalle, Andrew Hynard, said: “Now is a good time to buy. A lot of Danish investors are borrowing in the UK to avoid currency risks, with the result that they end up with a very safe margin.”
Churston Heard acted for L&G. H&B acted for Liverpool Victoria and is representing CPP. Strutt & Parker acted for ESL.
EGi News 12/12/01
