Why Investing in London Real Estate in 2019 And Beyond is a Good Idea

Why Investing in London Real Estate in 2019 And Beyond is a Good Idea

updated November 4, 2019

Many aspiring real estate investors deliberate at length about which property markets to invest in. Or, whether to invest directly into bricks and mortar, into commercial property bonds or maybe even buy-to-let properties.

In the majority of cases, investing in London real estate always comes to the fore as one of the primary choices.

One of the perennial advantages of real estate investment in London is the diversity of opportunities available. Plus, even in downtimes, there is always ample liquidity: there are always buyers ready to buy!

So, no matter the economic or, more so nowadays, the political climate, real estate investment in London in 2019 and beyond is a good idea for both aspiring and seasoned real estate investors.

Top 10 Reasons for real estate investment in London

Through good times and bad, London has retained its title as the world’s top destination for investment in commercial real estate.

Despite ongoing issues with the political and economic uncertainty due to Brexit, London remains by far the largest global destination for investment in real estate. Indeed, there was over £16 billion invested in the UK capital’s commercial office sector in 2018.

But why do savvy investors seemingly always favour London real estate?

Well, here are ten top reasons for investing in London property:

1) The city has a reputation as a safe haven for investment. Domestic and foreign investors, including many sovereign funds from Asia and the Middle East, have always preferred real estate investment in London, owing to the city’s economic and financial stability.

In 2018, as an example, capital from the Far East as a whole accounted for 47% of all investment in Central London. There were investors from China, South Korea, Singapore, Malaysia and so on, with Chinese investors alone spending over £3bn and accounting for over 20% of all investments during the year;

2) A number of long-term investors see the current political turbulence caused by Brexit and the associated currency volatility as an opportunity to increase their investment holdings on favourable terms;

3) The London commercial market has strong occupational market fundamentals and property assets are relatively highly liquid. Even in bad times, there are buyers for quality properties;

4) Being a global financial centre, funding for commercial property transactions is usually readily available;

5) The institutional nature of the London office market has created an investment market geared to the investor. The longer leases, usually on a FRI “triple net” basis, ensure the returns from a quality property can be similar to a bond, with a guaranteed minimum fixed income over the term of the lease. In many cases, the yield is secured on better quality properties than in other global markets;

6) The London real estate market is a very transparent and relatively easy to understand market. It is ranked as the most transparent real estate market globally by JLL;

7) Investment in London real estate offers an investor a relatively friendly regulatory framework and tax regime with no barriers to real estate ownership and/or the transfer of funds in and out of the country;

8) Real estate investment in London offers a guarantee of title which is especially valued by overseas investors, as they may not be able to own land outright in their home country. Freehold is preferred but more experienced overseas investors are also comfortable in the long-leasehold structure of some London office real estate;

9) London has an excellent infrastructure, financial and physical security, as well as many renowned educational establishments and an abundance of talent in a workforce originating from all over the world;

10) Best of all, as smart or well-informed investors will tell you, quality properties in London consistently appreciate in value over time.

Commercial property investment bonds

Given the strong attraction to investors of being involved in real estate investment in London, the only real decision is how best to go about making such investment. For many, investing in commercial property investment bonds is a great way to participate in the market.

Commercial property bonds offer a variety of benefits and these include:

1) The bond can be asset-backed. The Nao Bond is asset-backed with development assets. In the unlikely event that it becomes necessary, the assets, whether land or buildings, can be sold to repay investors the sum they invested.

2) Attractive interest rates are offered. The Nao Bond offers fixed interest rates of 8.25% per annum.

3) Bonds offer a fixed maturity period. The Nao Bond is a 5-year investment with 3-year redemption period to accommodate a shorter investment strategy.

4) Property investment bonds are one of the best and most affordable ways to capitalise on a developer’s property experience, knowledge and efforts, leaving the investor stress free, only being required to collect interest payments!

5) Diversification is key when it comes to investing, whether you are an aspiring investor or well experienced in real estate. Spreading risks and placing hard-earned cash in a commercial property bond issued by an experienced developer allows investors to minimise their exposure;

6) Most property investment bonds on offer include an “early exit” clause, meaning that the contract for the bond can be terminated at any time and a refund of the principal invested requested;

7) Property investment bonds are tradable.

Your first real estate investment in London

Investing in London real estate can be very rewarding whether this is in 2019 or 2020 and beyond. If you want to invest in commercial property in the UK, all you need to do is make sure you pick the right way to get started.

Investing in commercial real estate bonds can be an excellent first step for aspiring investors—without the worry of development-related hassles.

Property investment bonds also enable investors to avoid paying maintenance fees, stamp duty, council tax, insurance payments and tenancy issues—all related headaches of building property—and still invest in the London property market without taking on debt.

Nao Group has a long history of development projects in London, offering both corporate and individual clients the opportunity to invest in commercial property investment bonds. As an example, to capitalise on the explosive growth of coworking, through the launch of a corporate bond, Nao has recently created a profitable investment opportunity in the sector.

Nao Group is a commercial property developer creating coworking and co-living spaces across the globe: building communities, not just places to live and work!

So, if you’re looking for great asset-backed investments into coworking or other commercial spaces in London and are interested in learning more about Nao’s property investment bonds, contact us today. Alternatively, you can take a look here to learn more about us.

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