Research by Savills World Research, using Real Capital Analytics, has stated that while it is unclear if the current economic climate in the UK has been the sole reason for a surge in investment by US and other foreign countries, there has been a flurry of activity from abroad.

Rasheed Hassan, head of global cross-border investment at Savills, comments: “It’s hard to disentangle how much currency fluctuations may have played a role in cross-border investors’ decisions to buy commercial property in the UK this year, as it’s just one factor that may drive decision making and isn’t an influence for every type of investor. Sterling’s depreciation is also relative as other currencies have also seen turbulence this year.

“Anecdotally, we believe it has piqued the interest of a number of foreign investors who do see the current moment as a buying opportunity. Hotspots of activity are likely to come from deep pools of private capital based in Hong Kong, Singapore and the Middle East, as all have currencies that have strengthened considerably against the pound and view UK property as a safe haven in an uncertain world.”

A statement by Savill’s World Research said: “The quieter quarter was not simply isolated to US investors. Market uncertainty was already starting to creep in. There wasn’t clear evidence of price moves in transactions, however we were seeing softening in bid levels from some investors, in particular those using debt in their acquisitions.”

Given devaluation of the pound, the UK looks particularly compelling for US Dollar denominated investors. However, currency is seldom the sole driver for investment. The asset price moves we are seeing in the UK right now are serving to encourage interest from investors across the world. Major US investors on the whole have been biding their time but we are starting to see a notable uptick in their conviction to invest.”

“The greatest interest is being generated in assets with significant price moves and / or in sectors with the strongest fundamentals and those that have the most compelling rental growth prospects such as life sciences, living, and logistics. For the London office market the same logic applies: the strongest rental growth prospects sit within the highest quality and best located assets. This is where we are seeing the smallest price moves.”