US buyers invest £13.6bn into UK commercial properties in 2024

Last year, the flow of capital from the US outpaced inward investment of all other nations combined, with nearly half of the 62 deals worth over  £100m completed by a US buyer.

The first annual report from the British Property Federation (BPF) and CoStar Group quantifies the scale of investment from overseas since 2021 into a range of property asset classes.

The report found that over the past four years, American investors have bought £49.7bn worth of UK commercial properties, surpassing acquisitions from elsewhere in the world.

A particularly active part of the market has been American private equity buyers, with four of the five largest transactions in 2024, amounting to £5bn, involving major US investors.

Investment from private equity was directed primarily into hotels and mixed-use portfolios in 2024, however, according to the report an uptick in larger transactions in London’s West End towards the end of the year indicated a growing appetite for prime offices.

While London remained the preferred area for overseas investment, the BPF and CoStar identified the maturing of the BTR sector and demand for student housing as driving factors for investment into the North West.

Together with the West Midlands, the North West has drawn more foreign capital than other regions (outside of London and the South East) over the past several years.

The industrial and logistics sector received the majority of overseas investment between 2021 and 2024, accounting for a quarter (24%) of all overseas investment into the UK.

Melanie Leech, CEO at the BPF, comments, “The UK real estate sector is a pre-eminent destination for global capital and we are delighted to launch with CoStar, our first annual report setting out the origin and scale of investment from overseas across the UK.

“We hope that these reports over time will build a picture of investment trends, and showcase the contribution of the sector to the economy and its wider role in boosting economic growth.

“It may not be surprising to see that the US tops the list this time for overseas investment given that US investors have been instrumental in the growth of the build-to-rent sector, providing more than a hundred thousand modern, professionally-managed homes, but also play an important role in the market for offices, logistics and, increasingly, retail.”

Grant Lonsdale, senior director of market analytics at CoStar Group, said, “Our comprehensive building and transactions data used to compile this report reveals an array of notable international investment trends into UK commercial property.

“One that is especially noteworthy is that although London attracts the lion’s share of cross-border funds flowing into the country, other regions are catching up as investors increasingly target the living and industrial sectors.

“We look forward to continuing to provide the data and analysis to examine this and other foreign investment into UK real estate trends shaping the market together with the BPF in future reports.”