United Kingdom Property News

Knight Frank sees foreign surge into UK property

London is attracting increasing volumes of overseas funds into residential and commercial property, leading to a rise in annual revenues for upmarket property agent Knight Frank, despite the domestic economy shrinking.

The company, one of the biggest partnerships in the UK, said revenues grew 8pc to £334m in the year to March 31.

This means Knight Frank’s 61 partners will share a profit of £65.2m, down from £72.7m last year because the property agent spent capital on opening new offices in South Africa, Dubai, Australia and India.

Knight Frank is well known as a rival to Savills in selling luxury homes across the UK. And as a major commercial property agent it has sold Battersea Power Station to a Malaysian consortium and is helping to find office tenants for the Shard.

The Battersea Power Station deal highlighted the continuing overseas interest in London as a safe-haven for investments. According to Knight Frank, nearly 70pc of the offices and shops sold in central London in the last year were to foreign buyers.

There is also a foreign investment surge into prime residential London property. Knight Frank’s data shows that the prices of prime London housing are now almost 50pc more than in March 2009 and rose 11pc in the 12 months to March 31.
However, the property agent warned that, since new stamp
duty rates unveiled in the 2012 Budget, sales of properties worth more than £2m in London have slumped 20pc year-on-year. Outside London, the market remains “highly polarised on grounds of geography and quality”, while there are also concerns about a slowdown in major Asian economies this year as contagion from the eurozone debt crisis depresses exports and sentiment.
Nick Thomlinson, senior partner for Knight Frank, said: “The firm has made substantial investment into the business over the past year.”