Forget Brexit. Investors have been voting with their cash, as London saw £5.6bn of inflows during the first six months of 2018. The fact that the UK capital has attracted more investment, compared to other cities like Munich, Paris and Frankfurt, shows that it remains the world’s top property hotspot. A recent study showed that most of the investors came from Asia.
As if to further show that demand for a London property remain strong, the vast Plumtree Court scheme owned by Goldman Sachs was sold to the National Pension Service of South Korea. According to reports, the sale price was a whooping £1.2bn. It was also revealed in the report that the US-based banking behemoth will lease back the site for a period of 25 years. When Plumtree Court opens in 2019 under new ownership, it will be the new European headquarters of the US banking giant. In what seemed to be a confirmation of the vote of confidence for London property investment, the vice-president of Goldman Sachs, Richard Gnodde, said that their long lease shows their unrelenting commitment to the UK capital.
A Bright Future
A huge influx of investments into London properties, coupled with the commitment from Goldman Sachs, seems to invalidate the claims of Remain advocates. It should be remembered that Remain campaigners repeatedly made doom-laden warnings that Brexit will cause London to suffer dramatically and that property prices would crash. Contrary to what they claimed, a report by Knight Frank revealed London remains to be the top city of choice when it comes to international property investment. At the very least, this fact makes a mockery of their vision of Brexit doom.
Among the biggest property deals in 2018 were the purchase by Ho Bee Land of a stake in Ropemaker Place, valued at £650m, and CK Asset Holdings’ purchase of the ‘Groundscraper’ at 5 Broadgate for £1bn. Ho Bee Land is based in Singapore while CK Asset Holdings is part of the empire of Li Ka-Shing, the shrewd Hong Kong billionaire.
Asian investors dominated the investment scene, pouring a massive £4.4bn into deals. In contrast, Paris trails with just £1.9bn in investment deals.
This prompted the Head of City Capital Markets at Knight Frank, Nick Braybrook, to declare that London has recaptured its place as the most liquid property market in the world.
This is despite the chaotic political circus around Brexit.
The Reason Knight Frank revealed that the secret to the appeal of London properties lies in its ability to remain stable in the face of uncertainties, its transparency in all aspects, and, above all, its liquidity. According to Baybrook, London tops the list for many wealthy individuals, when it comes to making their first overseas property investment. Other multimillion deals are the £300.5m purchase of Regent Quarter by Nan Fung, the acquisition by Mirae Asset Management and Hines of 20 Old Bailey for £341m, and the purchase by a Chinese consortium of the 40 Leadenhall ‘Gotham City’ building. The report from Knight Frank also revealed that the five biggest property market transactions in 2018 involved Asian capital. All indicators point that this trend will continue in the years to come. This proves that the London property market does have a bright future indeed.