LONDON (Reuters) - One in three British commercial properties now have foreign landlords, but that ratio is set to dip slightly next year as real estate prices cool, a report from insurance firm Royal & Sun Alliance said on Wednesday.
According to the property investment underwriter, overseas-based investors directly own 22 percent of all commercial real estate, compared with 15 percent in 2000, before foreign buying of UK property really took off, driven by demand for office buildings with sitting tenants on medium-term leases.
A further 10 percent of all commercial buildings was owned indirectly through funds, while overseas businesses with a physical presence in the UK owned 1 percent, the report said.
Royal & Sun Alliance said investment in UK commercial property — which has expanded by a third in the last seven years — would continue growing in the long-term but was set to ease in the short-term as the economy adjusted to fallout from the U.S. subprime mortgage crisis.
Regions such as London that catered more for the service sector would also receive more attention from overseas investors than those that did not, it said.
(See www.reutersrealestate.com for the global service for real estate professionals from Reuters).
Reporting by William Kemble-Diaz, editing by Will Waterman