US investors account for a third of capital deployed in UK CRE

US companies are by far the biggest overseas investor in UK commercial property and in 2024 they deployed £13.6 billion in the British market, more than double the amount spent the previous year, according to a new report by the British Property Federation and CoStar, which has just been released.

American investors accounted for a record 33% share of all investment into the UK in 2024. The flow of capital from the US eclipsed inward investment of all other nations combined, with nearly half of the 62 deals larger than £100 million completed by a US buyer. Over the past four years, American investors have bought £49.7 billion worth of UK commercial properties, dwarfing acquisitions from elsewhere in the world.

“The UK real estate sector is a pre-eminent destination for global capital,” said Melanie Leech, chief executive, BPF. ““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 BTR sector, providing more than 100,000 modern, professionally managed homes, but also play an important role in the market for offices, logistics and, increasingly, retail.”

A particularly active part of the market has been American private equity buyers, with four of the five largest transactions in 2024, amounting to £5 billion, involving Blackstone, Starwood Capital, KKR and CD&R-backed Motor Fuel Group. Private equity was primarily investing in hotels and mixed-use portfolios in 2024, but an uptick in larger transactions in London’s West End towards the end of the year indicates a growing appetite for prime offices.

While London remains a magnet for global capital, the UK’s regions are catching up as investors target beds, sheds and increasingly retail. The South-East remains the preferred region for inward investment from overseas, but the maturing of the BTR sector and demand for student housing is driving 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 few years.

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

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.

This is the first report tracking overseas investment into the UK since 2021 and will be published annually from now on. “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,” Leech said.