DESPITE the cost of money being at a 20-year low in most key international financial centres, there is a drought of cash in most overseas property markets. A wealth of good investment opportunities now exists as property markets begin to crawl out of a deep trough, but many of the sector's biggest domestic players seem either too hurt or too frightened to risk their money. The lack of ready domestic buyers has allowed wealthy, bullish Hongkong investors to pile in at the bottom of the market and take their pick of the best investments in town. Hongkong property investors have been most interested in Canadian, Australian and United States property in recent years, but now the London commercial scene seems to be attracting them. Real estate has been out of favour with most big institutional investors for some time, but now there seems to be just the faintest signs of a change of sentiment. Many entrepreneurs who made their money in the booming world property market of the 1980s have lost it or still owe it to the banks. Banks, which suffered badly from the slide in international property prices, are naturally being very cautious and selective about any new lending. Renewed Hongkong interest has coincided with Britain's withdrawal from the controversial European Exchange Rate Mechanism, which sent the pound and bank base rates sliding to far more attractive levels for foreign investors. Yields on investments are now higher than the cost of financing. A lot of investors who have been cautiously eyeing the London market have decided to jump in. About 70 per cent of commercial property buying in London is coming from overseas. Japan is not an active player this time as it suffers a shortage of ready financing at home. Instead buyers have essentially been coming from elsewhere in Europe and the Far East. The volume of Hongkong interest has grown by the month. Jones Lang Wootton's GBP30 million (about HK$360 million) sale of Nightingale House in the West End of London to a Hongkong investor last week was the latest in a string of large deals made by buyers from the territory. The London property market is changing and is consequently difficult to monitor. However, a growing number of positive economic indicators has helped instil confidence that perhaps the market is now on the long road to recovery. The value of property shares in London has risen 50 per cent during the past six months, showing that the stock market at least believes that the UK property market is off the bottom. Commercial property prices have risen 10 per cent since the end of last year, while yields have slipped from between 8.5 and 10 per cent to seven to nine per cent during the same period. But despite a halt in construction, the London market still suffers serious oversupply: 19 per cent in the City of London and nine per cent in the West End, according to Jones Lang Wootton.