Over half London's City offices foreign owned

British investors own less than half the office properties in London's City financial hub, with foreign ownership of towers such as the Gherkin likely to continue, a report said.

Property company Development Securities said 52 percent of City office blocks were foreign owned in 2011, up from 8 percent in 1980, with German and U.S. investors hiking their stakes considerably over that period.

"City (of London) offices are perceived to offer quality and transparency -- a 'safe haven' for foreign buyers who have, in turn, deepened liquidity in the market," chief executive Michael Marx said in the report 'Who Owns the City'.

IPD figures showed property values fell 50 percent during the global financial meltdown to August 2009, subsequently rebounding 25 percent, creating a buying opportunity for cash-rich investors such as sovereign wealth funds, pension funds, insurance firms and real estate investment companies.

"Traditional owners -- livery companies, institutions, established property companies -- have experienced a sharp decline in City office ownership," Development Securities said, noting these investors now held 17 percent of the office stock, from 29 percent in 2005.

In their place, German investors hiked their market share to 16 percent, from 1 percent in 1980. U.S. investors held 10 percent, from zero, while Middle East investors weighed in at 6 percent, from 3 percent, the survey found.

The 180-metre tall Gherkin tower -- so-called because of its shape, one of the most distinctive in the City -- has been part-owned by German property behemoth IVG Immobilien since 2007.

Foreign ownership increased during the global financial crisis, Development Securities said, noting the changing dynamics of globalisation and international investment would continue to be reflected in City office ownership.

"Such resilience would appear all the more remarkable in the light of the City's associations with the failures of the international financial system. What offsets the systemic risk in relation to the City's lack of diversification is the exceptional liquidity that characterises its office market."

The Development Securities survey also showed the changing profile of owners, with a growing trend towards private ownership by high-net-worth individuals.

In terms of functional ownership, 41 percent of the office space was owned by companies in the finance, insurance and real estate sectors, and 57 percent by financial and business services firms.