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The appeal of commercial real estate investments in London is unlikely to be diminished in the short to medium term, according to new research published by Savills. The firm explained the main reason why the UK's capital is currently attracting such a high volume of investment is the ongoing eurozone crisis, and London's safe-haven status. Approximately 60 per cent of those buying up assets in the city last year were non-domestic investors, highlighting London's international appeal. Savills stated there are certain steps that need to be taken to ensure funds continue to flow into the UK capital's property investment market.Among the measures suggested by the real estate firm are consistent upgrades to London's transport infrastructure, boosting housing stock in the city and ensuring there are excellent links to other international business destinations. In addition, the organisation warned the government to be careful when introducing new regulations relating to the financial services sector, as unfavourable legislation could result in global companies basing themselves elsewhere. Savills acknowledged changes need to be made to the industry, but stressed these should not "put London at a competitive disadvantage to other competing centres".Overall, the company is upbeat about the commercial real estate sector and expects the city to attract international investors for many years to come. "Although more can be done, with incoming investors looking for holding periods of up to 30 years, this reflects long-term confidence in London's future," the report stated. Earlier this month, the CBRE monthly index for the UK's commercial real estate market highlighted the West End as the top-performing district, generating returns of one per cent in July, which is considerably higher than the country's average of 0.2 per cent. Across central London, investment returns stood at 0.7 per cent last month. The city is also the only part of the nation where capital value growth has been experienced, with the West End once again leading the way in July as assets climbed in worth by 0.7 per cent, while central London managed an increase of 0.4 per cent.
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