On the face of it, the figures look stark. London is one of the world’s biggest commercial property markets but wheeler-dealing has slumped since Christmas, according to data from JLL. Investment deals were down 40% in the first quarter, totalling £1.5 billion, the property agent says.
From here it’s easy to construct a narrative about Westminster turmoil putting the kibosh on property deals as a baffled world looks on and ponders whether to sink its billions into London. Easy, but wrong.
The Brexit headlines have certainly put a pause on getting deals over the line, but below the surface there are plenty of transactions in the works and leasing deals to be struck as soon as the white smoke emerges from Downing Street.
Buyers in the market include Great Portland Estates, which is about to buy BT’s headquarters in the City. Among the other big listed players, LandSec meanwhile is being linked with practically every major development up for sale at the moment, having being over-cautious on its stance immediately after the referendum.
Another boss of a big West End property firm talks over lunch of the billions earmarked for London property by the likes of Norges, Norway’s sovereign wealth fund. UK institutions — crowded out by the foreign money in recent years — are back in the market and there’s some £2 billion in London buildings under offer but not yet completed, according to JLL.
The foreigners haven’t gone away, though: Hong Kong investors are still hungry for property and senior industry figures say that a “Trump effect” is also putting Asians off buying in the US.
Property has its big headaches: you don’t want to be in shopping centres at the moment, as Intu’s woes suggest.
But in London — Europe’s pre-eminent destination where decent space is still in relatively short supply — you’d be unwise to bet against it in the long-term.
Dunkerton needs to convince City fast
Superdry founder Julian Dunkerton has some convincing to do having won back the retailer and today’s latest share fall doesn’t suggest much faith.
Though the “never go back” rule of football management doesn’t necessarily apply to business — think Steve Jobs at Apple for example — Dunkerton’s return is unsettling in the short term and he has to show the City some new tricks very soon.
Relying on hoodies and coats isn’t going to cut it.
