By Denny Thomas

HONG KONG (Reuters) - Some Asian institutions and wealthy investors are eyeing London property despite turmoil in the market following Britain's decision to leave the EU, with the subsequent plunge in sterling among the factors making prized assets more attractive.

Panicking retail investors concerned about a possible meltdown in British commercial real estate prices tried to pull money out of property funds, triggering the suspension of 18 billion pounds ($23.4 billion) of such funds this week, the biggest since the 2008 financial crisis.

Property deals in the process of closing have also been re-priced lower in the aftermath of the June 23 referendum on EU membership, because lawyers have inserted "Brexit" clauses in the contracts, said Mat Oakley, head of commercial research at Savills Plc <SVS.L> in London.

But for some rich individuals and private equity investors in Asia with cash to spare and an appetite for risk, the market is a tempting bet.

"We have seen an increase in inbound inquiries since the Brexit vote, especially from Asian high net worth individuals and family offices, who still see London as a safe destination for property investments," said Henry Chin, head of research for real estate broker CBRE Asia Pacific.

Asian investors are unlikely to have been affected by this week's fund suspensions, as they do not have a high exposure to them in Britain and tend to invest directly in apartments and houses, said Johnny Heng, Wealth Management Chief Investment Officer for Asia ex-Japan at Nomura.

BIGGEST BUYERS

Flush with cash and seeking to diversify investments, Asian players were among the biggest buyers of central London properties last year, accounting for 19 percent of 20.5 billion pounds ($26.6 billion) in deals, according to CBRE Research.

Some want more.

"(London) will still be the key financial capital and insurance capital to the world, (and is) not likely to be replaced by Frankfurt or Paris in the near future or ever," Goodwin Gaw, Chairman and Managing Director of Gaw Capital Partners told Reuters.

"The weakening pound and sellers who have the opposing view to us represent opportunities," said Gaw, who helps manage $12 billion in global property portfolios. "(We) still will be interested but need to see a proper correction first," he added.

With vacancy rates of 4 to 5 percent in the financial district and the development pipeline expected to be constrained because of the Brexit vote, the fundamentals of London commercial real estate look attractive, said Oakley.

Laws that forbid a roll-back in rents also make British property alluring as the yield is protected.

These factors have prompted Chinese investors, who together with Hong Kong buyers accounted for 45 percent of Asia's central London purchases last year, to splash millions of dollars in top end London apartments, golf clubs and vintage properties in the British countryside.

For the moment, some large Asian property investors said they remained committed to Britain.

"The leadership vacuum in British politics is not a matter of concern," said a source close to Chinese private conglomerate Fosun Group <0656.HK>, which has an active pipeline of both commercial and residential property in London.

Fosun did not offer an immediate comment.

In a sign of tensions in the market, the source said Fosun had been approached by a number of British residents considering selling their London commercial properties since the Brexit vote.

Singapore's GIC, the Asian sovereign wealth fund with the biggest exposure to UK property, also said it was prepared to ride out short-term volatility caused by Brexit.

"We take a long-term view when investing in a particular city or country," Lee Kok Sun, Chief Investment Officer, Real Estate for GIC told Reuters.

Some London-based property investors and property owners, however, are cautious.

"There is so much uncertainty ... it's extremely difficult to make an honest and logical opinion," said London-based Michael Browne, co-portfolio manager of the $294 million Legg Mason Martin Currie European Absolute Alpha Fund.

"We're in the worst of the vacuum at this point," Browne said.

($1 = 0.7704 pounds)

(Additional reporting by Pamela Barbaglia in London, Herb Lash in New York, Ross Kerber in Boston, Sumeet Chatterjee in Hong Kong and Saeed Azhar in Singapore; Editing by Lisa Jucca and Mike Collett-White)