Daily Management Review

Tier II Cities In UK And Europe Preferred By Asian Investors Seeking Cheaper, Smaller Properties


02/27/2018




Tier II Cities In UK And Europe Preferred By Asian Investors Seeking Cheaper, Smaller Properties
Smaller units and higher yields are the preference for Asian investors who are seeking to purchase property in the United Kingdom and Europe. Therefore, their focus is now turning to tier 2 cities, say realtors.

Tim Murphy, founder and chairman of IP Global, said in a media interview that investors originating from Hong Kong, mainland China and Singapore are eyeing properties in Berlin and Frankfurt in Germany and in Manchester, Liverpool and Leeds in the U.K. IP Global is a Hong Kong based property investment firm.
 
“The UK is still considered to be the No. 1 market, but not just London any more,” said Murphy. 
 
He added that the trend has been contributed by in part by the capital control measures initiated by the Chinese government in late 2016 which has forced investors to look for properties that are smaller and cheaper and yet high yielders.  
 
According to a survey conducted on Hongkongers by IP Global in April of 2017, large number of residents of the city are seeking to invest abroad compared to those who want to invest in the city’s real estate in the next 12 months.
 
And while UK remains the primary destination, London is no more the most sought-after destination in terms of investment in foreign property.
 
“We have seen a huge uptick in investors from Asia-Pacific looking at so-called second-tier cities in the UK, Manchester and Birmingham being super popular,” Anne-Marie Sage, head of international residential property at real estate consultancy JLL, said. 
 
She added that the increase in the number of Asians seeking to invest in the U.K. has also been spurred by a weaker pound.
 
“People are more price-sensitive now, since the economy slowed down and black swans such as Brexit,” said Murphy. 
 
according to IP Global’s Global Real Estate Outlook 2018 report, the highest returns for investors is likely to be given by Manchester. The report notes the potential of a boost in the economy of Northern England due to the “Northern Powerhouse” project of the U.K. government and the increasing number of college students in Manchester to be the drivers behind the possibility. According to the report, there would be a rise of about 30 per cent I property prices in Manchester.
 
The report further stated that there would be a rise in property prices of about 17.5 per cent in Liverpool between 2018 and 2021. It is the second-largest economy in the North of the U.K. and is anticipated to be furthered by the development plans of the prime waterfront area of the city for £5 billion (US$7.02 billion).
 
Berlin and Frankfurt are the prime targets of Asian investors elsewhere in Europe.
 
With a rise in population of about 10 per cent between the years 2005 and 2016, Berlin is recognized as hub of start-ups in Europe. According to the Deutsche Bank, there was a rise of 10 per cent in house prices there in 2017 year-on-year and this trend is anticipated to continue at comparable rates in 2018.
 
The Deutsche Bank also noted an increase of 15 per cent in house prices in Europe’s financial centre, Frankfurt due to an increase in job and population. Brexit and an expanding economy of the city is expected to further drive this trend.  
 
(Source:www.scmp.com)






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