Solent: Overseas buyers look to South Coast property investments

As Theresa May triggered Article 50 to start the process of withdrawing from the EU, JLL said that depreciation in the pound was expected to lead to increased investment from overseas purchasers in Southampton and along the South Coast.

Although currency movements have not had a strong historic correlation with overall international capital inflow into the region, they are part of the reason why the market has experienced a recent surge in demand from overseas buyers such as North America, the Middle East and the Asia Pacific region, including from Hong Kong and mainland China.

Emma Eaglestone, head of JLL’s Southampton office, said: “We continue to see the emergence of Chinese capital globally. Chinese investors now rank just behind US as the second largest source of global cross-border capital and we expect them to have an increasing influence on our regional property market.

“Many overseas investors, not least those from China and the wider Asia Pacific region, come to the UK with different motivations and return aspirations to traditional UK and global investors. They seek diversification and safe haven forms of investment, and are attracted to the depth, liquidity and familiarity of the UK market, including the South Coast.

“For many long-term investors, sterling deprecation provides an added fillip to the investment case, based on their perception that it may appreciate once there is more clarity around Brexit and its economic implications, but it is not a case of one-size-fits-all.

“Private investors have responded to the depreciation more than institutions and global asset managers, and as a result they have become a more important driver of market sentiment and pricing. Despite the triggering of Article 50, as 2017 progresses we expect global funds and institutions to return their focus to the South Coast market, in response to relatively attractive pricing and as more evidence of occupational market resilience comes to light.”