Editor: With all the noise surrounding Brexit you would be forgiven for thinking that London is teetering on the edge of economic purgatory, and of being cut off from the supply of cautious global capital. The reality is altogether different. London is still a global gateway attracting major amounts of capital to stable, long-term growth investments.
London’s fundamentals – talent, currency, language, culture, infrastructure, liquidity and rule of law – ensure that it remains a key economic centre and provides a diverse economy. The growth of creative industries has given the city a new edge in the occupational market, with office demand from this sector now outstripping that of banking and finance.
In the past decade, London has outperformed Berlin, Madrid and Paris in terms of population, employment and GDP growth, illustrating its enduring appeal to global investors.
Swathes of London will also benefit from the Elizabeth Line, Northern and Bakerloo Line extensions, High Speed 2 and Crossrail 2. New areas are being unlocked with more attractive pricing than the saturated central locations and offering greater potential returns for investors.
Asia Pacific has been one of the most critical sources of global investment. In CBRE’s recent Investor Intentions Survey, 89% of Singaporean investors and 80% of investors from Korea and Hong Kong said they intended to invest overseas.
There is reason to be optimistic that London will continue to attract them. Between 2016 and 2018, London office investment turnover from Asia Pacific investors totalled $24.2bn (£18.5bn), with 64% targeting long-term stabilised assets.
London continues to rank as one of the preferred destinations for Asian capital. It is consistently in the top five globally for market size and liquidity, two of Asian investors’ critical investment metrics, and is the most liquid market in Europe. The previously attractive US real estate market is also increasingly unattractive due to tax and protectionist policies, shifting Asia Pacific investors’ attention to Europe.
In an often febrile global economy, London offers stability and security for global investors, particularly in commercial real estate. In spite of headwinds, the capital is set to continue as a global powerhouse.
James Beckham, head of central London investment, CBRE