Special Guest Post by Carlo Pandian
Commercial property developers in the West End are finding that the UK is still a powerful centre for business, despite the recent re-entry into recession.
Business property in London continues to go from strength to strength, and is being supported by overseas investors, who continue to see London as a safe-haven amid the Eurozone crisis, and by growing TMT industries that are continuing to expand their operating space.
Overseas investors account for over half of acquisitions in London, an increase of 57% on a decade ago.
A major developer, Great Portland Estates, reports that it was able to let a record amount of commercial property space in the past year, which has driven up the value of its £2 billion London property portfolio by over 9%.
Similarly, Shaftesbury, which owns a considerable amount of property in London’s West End, reported that its entire portfolio had been “virtually fully let”, though it saw a more restrained half-year rise in the value of its portfolio (1.4%), with all of its assets let.
"London's West End continues to be busy and prosperous”, said chief executive Brian Bickell. “Our portfolio, underwritten by the West End's special features and attractions, continues to flourish and we remain confident that it will continue over time to deliver rising income and rental values.
“This in turn should bring long term growth in capital values which, coupled with low obsolescence in our assets, should allow us to maintain our record of out-performing the wider property market."
Toby Courtauld, chief executive of Great Portland, said that London’s property market remains a secure favourite against the instability of the UK and Eurozone economies.
“Nothing is ever totally bulletproof but London property is a very good place to be”, he said.
“Tenant demand for new space is trending at the long-run average, with some pockets of strong interest from the likes of the TMT sector, while the supply of new space is low,” he said.
With the Olympics set to arrive in London this summer, the focus will be on the English capital as one of the world’s prime property investment hubs.
Carlo Pandian is a freelance writer and blogs for UK Business Property on real estate, investments and design. He loves reading great architects biographies and speaking at conferences about how design can help making our life better.