London Real Estate keeps the City attractive to investors

London Real Estate, together with public administration & defence and finance & insurance, ranks high in the recent OSN (Office for National Statistics) report which charts the activity of the Capital’s main industries in Q2, April to June 2020. Although performing below levels in February, as all other sectors, the real estate plays a significant role in keeping the City resilient and attractive to international and domestic investors.

A recently commissioned research by FTI highlights the fundamentals behind the positive outlook for the City of London which is the driving force backing the recovery for the whole Greater London. 99% of the first pool or global investors in the survey ‘showed that they are still keen to invest in the City, with 79% currently actively doing so’. Despite the wide economic and public health issues, it is ‘the access to global talent and quality of life’ that propels London further than any other comparable investment location.  London was also ranged high on connectivity, attractiveness as a hub for business and environmental, sustainability and governance issues. The City’s resilience was assessed on its ability to adapt and to innovate ways of doing the business, as well as the confidence it projects as a leading finance centre able to get the workforce to return once the pandemic is over.

Catherine McGuinness, Policy Chair of the City of London Corporation, said: “It is testament to the fundamental strength, resilience and adaptability of the City that despite the COVID-19 crisis the Square Mile remains such an attractive long-term location for continued global investment and location of talent. There is no denying that we face testing times, but the City and London have always adapted to major challenges throughout history. We will continue to strengthen our attractiveness as we create the conditions for businesses of all shapes and sizes, as well as the real estate investors and developers who support those companies, to prosper over the coming decade. In particular, the City of London aims to become a world leader in sustainability, becoming a global centre for excellence in climate resilience, and will we be refocusing our pre-pandemic agenda on the built environment, transport and digital connectivity to reflect the new economic and social reality. We also note investors’ wish to see a robust pandemic recurrence and prevention plan, and are working with the Government and other stakeholders to provide the assurances that businesses and investors need.”

The original blog post was published by Europe Real Estate and the poll, conducted by FTI Consulting for the City of London Corporation as part of a global investor intentions survey engaging with 506 leading investors with assets under management of €850bn ($1tr), was undertaken on 5-10 July.

Another interesting comment from the same source published this week is based on a recent BNP Paribas Real Estate data that gives an insight into the recent Asian investors’ activity in London’s real estate. If judged by this geo investors group, which is very active spending approx. £629mil in the UK Capital in the first six month of 2020 - up 74.4% on the same period in 2019, ‘the level of (international) capital waiting to enter the London real estate market has remained high, creating competitive bidding scenarios for a number of assets’, says Europe Real Estate.

Earlier, in July 2020, the RICS Residential Survey results highlighted the ‘ongoing recovery’ for the sales market propped by the Stamp Duty holiday of 8 July 2020. The number of new enquiries as well as new instructions coming onto the marked rose sharply, followed by an increase in transactions and house prices moving ‘out of negative territory’. How will the market respond in the next 3 to 6 months depends on the wider government’s business support measures, some of which are ending soon.

Increased tenant’s demand and the higher number of new letting instructions (over the three months to July 2020), as well as the projected positive rental growth in the next three months (with the exception of London with projections still negative, at -1%) are indicators for a much better outlook for the UK residential lettings, according to the RICS Survey.

CLICK here for available properties to buy under £500,000.

CLICK here to get your property valued by Chase Evans