Feature: INVESTING IN THE UK
Investors back Britain The protracted process of separating from the EU was expected to loom over UK real estate long after Brexit day — yet, as Clive Bull discovers, investors bound for Britain are in buoyant mood
W
hile UK real estate investment volumes were depressed in 2020, investor confidence is now driving the country towards a strong recovery, according to Will Matthews, head of UK commercial research at Knight Frank. “Last year we saw around £5560bn (€66-72bn) of transactions in the UK, which is a pretty good year actually, all things considered,” Matthews says, indicating a broadly even split between overseas and domestic capital. Brexit, he believes, is not the factor it once was. The pandemic has induced a period of reflection inspiring landlords and occupiers to ask deeper questions about the spaces they want and how they will use them. There remains some evidence, though, of a “Brexit dis-
count”. “There is still a difference between what you might pay for a prime Central London office compared to say Berlin or Paris, and you might attribute that to Brexit, but it’s not a very big difference these days, so I don’t think people are making decisions on that basis alone. That gap has narrowed over the past year or so,” Matthews says. The capital remains a safe choice for other reasons, adds Matthews. “Over the last couple of years, London has still been pretty liquid and I’d say many other markets don’t approach its liquidity even in their best years.” He says industry dynamism is also a factor — “the financial markets and everything that goes with that, but also the technology sectors and life sciences”.
Myriad opportunities in the UK regions, including Newcastle, are inspiring fresh waves of capital
Jules Pipe, London’s deputy mayor planning, regeneration & skills, suggests this latter element is key. “Before COVID, we saw growing investment in medtech and laboratory space across the capital, which is of course accelerating now. The diversity of our population and the capacity of the NHS for medical trials and its unparalleled database puts London at the forefront of future global medical research, so we’re sure to see continued investment in facilities to support this.” Pipe says that while there has been some inevitable slowdown in construction resulting from the pandemic, planning activity has remained strong, particularly in offices and hotels, which reflects faith in London’s long-term resilience and intrinsic strengths. “London is a global leader for FDI and its attraction remains as
strong as ever. Opening later this year, the Elizabeth line will add 10% capacity to central London’s network bringing an additional 1.5 million people to within 45 minutes of the heart of the capital. It has created the capacity and conditions for major new headquarters for, among others, Facebook, Deutsche Bank and Société Generale, allowing for the accommodation of more than 300,000 new jobs in key employment hubs including Liverpool Street and Canary Wharf,” he says. The City of London in particular is proving a Mecca for development activity, says Alastair Moss, chair of the City of London Corporation’s planning and transportation committee. “We have seen strong developer confidence in the future of the City of London with unprecedented levels of planning applications. Important-
MIPIM PREVIEW • 57 • February 2022 MIPIM_UK_+D_+S.indd 1
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