It is no secret that the UK real estate market attracts more than its fair share of overseas investors. This fact has been covered in a recent report into the 250 richest people in the world who hold UK property assets. The report confirms that their combined wealth has increased by 40% to a staggering £300 billion.
Even though property assets have been a central part of any investment portfolio for many years, there does seem to be a direct correlation between the world’s wealthiest individuals and their fondness for UK property.
Billionaires and the UK
London is one of the major financial centres of the world and as a consequence it attracts the wealthiest of businesspeople. Indeed the Square Mile in London has, against all the odds, retained its top of the table position in the worldwide investment arena.
When you hear that billionaires such as Amancio Ortega, the man behind the Zara fashion chain and worth a staggering £45 billion, already owns an array of prominent West End properties this certainly gives credence to the report. Indeed, Mr Ortega recently acquired the former home of the Duke of Devonshire for £400 million and has converted it into an office block for hedge fund investors. It is estimated that his personal property empire is worth a staggering £5 billion!
It was also interesting to see Chinese investor Wang Jianlin figure prominently in the report with his real estate and entertainment business Wanda Group accounting for a large part of his personal £22 billion fortune. The subject of Chinese investors in the UK real estate market is a fairly hot topic although not all billionaires are ruthless business people. It is believed that Wang Jianlin is heavily involved in the Vauxhall Southbank regeneration programme and has redistributed an array of his personal wealth for the benefit of others.
Pressure on London real estate prices
Even though many people suggest that billionaires may well be willing to pay over the odds for prominent London real estate assets, this is not always the case. These are individuals who have haggled for the best deals all of their life although the significant number of extremely rich individuals involved in the London real estate market, and their personal wealth, would seem to have added a very strong backbone to London property prices.
Time and time again so-called “experts” have attempted to talk down the London real estate market but time and time again investors continue to take advantage of short-term uncertainty. However, as we have mentioned on numerous occasions, the cost of London real estate cannot continue to rise at the rate we have seen of late and we will see a period of consolidation at some point.
This report by Estates Gazette offers a very interesting insight into the role that UK property plays in the investment lives of the world’s richest billionaires. London has long been seen as the playground of the rich and famous and with properties changing hands at £400 million this does nothing to allay that reputation. However, these property billionaires have not amassed such wealth over the years without squeezing the best deals available!