Positive development of the London market with positive expectations for the future

The Central London office market is currently undergoing a period of significant change – but with big change comes great opportunity. The London Report provides occupiers and investors with thoughts and guidance for the year ahead as the Central London office market continues to shift.

This year’s London Report looks at why this great city is so adaptable and examines the next wave of changes to come. We forecast further transformation in the pipeline, with London set to become a centre of scientific R&D, drawing capital from investors unknown to the market before and extending its reach into yet more sub-markets. What is certain is that the next ten years of change will create new opportunities in the London real estate market.

This has not, however, translated into reduced market performance. Far from it. In 2018, London saw greater volumes of commercial real estate investment than any other global city at £16 billion. Similarly, 14.8 million sq ft was let in the London office market in 2018, the highest level since 2014 and 15% above the long-term average. Despite difficult sentiment, London continues to attract the interest of occupiers and investors alike.

While there are doubtless numerous twists and turns awaiting in the political process, we remain confident about London's future as a city and real estate market of global significance. Current events will not break London’s long-standing track record of responding positively and progressively to seemingly seismic events. 

As this report notes, there are four features that will serve to underpin the continued strength of the London office market.

Based on IMF figures, if London were a country, by GDP it would rank as the 25th largest in the world, far ahead of self-governing cities such as Hong Kong (in 34th place) and Singapore (37th). Figures from Experian Economics suggest that GDP has grown steadily every calendar quarter since the referendum. Taken together, and with the tech and scientific growth mentioned above, these factors prove London is an economic powerhouse big enough to rise above the turbulence of Brexit. 

 Despite Brexit, London still leads in European venture capital investment and foreign exchange trading. London’s position as a global economic hub will strengthen as the digital and scientific revolutions gain momentum

With over £16 billion of transactions in 2018, the London office market has seen more investment than any other global city, as has also been the case for nine of the past ten years.The role of foreign capital has never been more significant. Over 80% of acquisitions were driven by overseas purchasers, with a nationality mix that is becoming less heavily dominated by Far Eastern investors as European demand re-emerges.

Zdroj informací: https://www.knightfrank.co.uk/research/the-london-report-6133.aspx