JP Morgan Asset Management have revealed that 75% of the £19.4bn invested in central London office properties last year came from foreign buyers.
David Cameron has vowed that a 2017 vote on EU membership will happen if he is still in power after this year’s election, while Labour currently look less enthusiastic on the proposition.
If the proposed exit from the EU was to go ahead, it is predicted that a large percentage of that investment would fall in the future. 60% of foreign real estate investors admitted that they would be less inclined to contribute to the market if the UK was to leave the EU.
Billionaire Joseph Safra agreed on a £726m deal for the city’s Gherkin skyscraper in the fourth quarter of last year, while the owner of clothing line Inditex SA, Amarcio Ortega, paid upwards of £400m for Devonshire house in 2013.
It is estimated that any future deals similar to these would be severely jeopardized if the vote on withdrawing EU membership was to go ahead.
The potential change in the existing relationship with European real estate partners caused by the vote would drastically affect London’s current property value and therefore any continued growth.
By: Kirsty MacGregor
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