The current depression in the UK property market has attracted the interest of sovereign wealth funds. But while a number of concerns have been raised, these are mostly unfounded

As any firm with a sizeable commercial property department will know, the credit crunch has resulted in a reduced volume of investment transactions involving real estate – some surveys have noted a 50 per cent drop in Central London transactions from the high point of early 2007. There is a huge weight of equity looking to get back in the market, but every indication is that the bottom of the market has not yet been reached.
The state of the market has alerted one group of investors – the sovereign wealth fund (SWF) – as well as investors who have not traditionally been big players in the UK property market. Qatari-based funds are now behind the development of the Shard of Glass and Chelsea Barracks, while a Kuwaiti fund acquired the Willis Building from British Land. The activity has not been limited to direct investments, but includes the acquisition of listed property companies, with ­Gazeley and Minerva gaining the attention of Dubai-based funds over the past few months.

The headlines about money coming from Russia and the former Commonwealth of Independent States (CIS) has been ­principally focused on high-value residential properties in London, but Russian investors are also starting to pick up commercial assets, such as the 50 per cent stake in Beetham’s development at Blackfriars by the Moscow-based Mirax Group.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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