London’s office investment market will attract £46 billion ($62.9bn) in capital this year as investors look beyond the Covid-19 pandemic and focus on the strengths of the UK capital’s commercial property sector, according to Knight Frank.
The top three locations “with the highest amount of dry power capital” earmarked to buy commercial assets in London in 2021 include Greater China (China, Hong Kong and Taiwan) at £12.6bn, Singapore with more than £5bn and the Middle East with £3.9bn, according to the property consultancy’s annual London report.
“Despite the UK’s lockdown restrictions and the impact on global travel due to the pandemic, London’s appeal remains unwavering to global investors,” said Faisal Durrani, head of London commercial research at Knight Frank.
“This continues to be the case for Middle East investors who have spent £16.4bn over the last 10 years on London offices, accounting for just over 10 per cent of all London office investment.”
Britain saw the biggest rise in vacant shops in over two decades late last year, and the sharpest increase in empty offices since the global financial crisis of 2008-09, according to a quarterly study by the Royal Institution of Chartered Surveyors (RICS).
The RICS study showed a swing in demand towards industrial space - such as warehouses to service booming online shopping - and away from traditional retail and offices.
Forty-five per cent of working adults were working from home in the third week of January, according to the Office for National Statistics, the highest since June, after new restrictions were enforced across the country at the start of January.
RICS said office demand was weaker in London than elsewhere, especially away from prime locations, and surveyors do not expect any rise in office or retail rents for the next year at least.
However, Knight Frank said a development shortfall in London’s office investment market will spur future rental growth despite the pandemic-induced surge in remote working.
Only 3.2 million square feet of 26.6 million square feet of pipeline office developments tracked by Knight Frank will be delivered to the market by 2024.
At the same time, the long-run annual average take-up of new and refurbished space is 5.3 million square feet, said Knight Frank, with the supply and demand imbalance putting upward pressure on rents in the longer term.
London’s reputation as a safe haven and leading global city is also still an attraction for international investors, particularly as returns are attractive compared with other European and global gateway cities. Removal of the ‘no deal Brexit’ risk premium will be a further catalyst for capital markets activity, Knight Frank said.
“The pandemic will likely go down as one of the greatest disruptors commercial property has ever seen, however we may be on the cusp of a post-pandemic road to recovery for real estate,” said Mr Durrani.
The pandemic has also accelerated the focus on high-quality offices, with businesses increasingly choosing modern workplaces that offer amenities, wellbeing and sustainability. Knight Frank expects demand for prime offices to intensify, relative to poorer quality buildings, creating a greater disparity between the prime and secondary markets.
London also boasts the highest concentration of green buildings globally, at almost 3,000, offering opportunities for “green” investors and those looking to rebalance their carbon targets.
“Once you factor in a requirement for buildings to meet increasingly ambitious ESG [Environmental, Social, and Governance] credentials, it is clear the volume of office space available to satisfy demand for prime office space is limited," Mr Durrani said.
In Britain's residential sector, house prices fell in January for the first time since the introduction of a stamp duty holiday, according to the Nationwide Building Society, indicating that a mini market boom might be over as the end of the tax break approaches.
The average price of a house fell by 0.3 per cent from December to £229,748.
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Key findings of Jenkins report
- Founder of the Muslim Brotherhood, Hassan al Banna, "accepted the political utility of violence"
- Views of key Muslim Brotherhood ideologue, Sayyid Qutb, have “consistently been understood” as permitting “the use of extreme violence in the pursuit of the perfect Islamic society” and “never been institutionally disowned” by the movement.
- Muslim Brotherhood at all levels has repeatedly defended Hamas attacks against Israel, including the use of suicide bombers and the killing of civilians.
- Laying out the report in the House of Commons, David Cameron told MPs: "The main findings of the review support the conclusion that membership of, association with, or influence by the Muslim Brotherhood should be considered as a possible indicator of extremism."
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The years Ramadan fell in May
The most expensive investment mistake you will ever make
When is the best time to start saving in a pension? The answer is simple – at the earliest possible moment. The first pound, euro, dollar or dirham you invest is the most valuable, as it has so much longer to grow in value. If you start in your twenties, it could be invested for 40 years or more, which means you have decades for compound interest to work its magic.
“You get growth upon growth upon growth, followed by more growth. The earlier you start the process, the more it will all roll up,” says Chris Davies, chartered financial planner at The Fry Group in Dubai.
This table shows how much you would have in your pension at age 65, depending on when you start and how much you pay in (it assumes your investments grow 7 per cent a year after charges and you have no other savings).
|
Age
|
$250 a month
|
$500 a month
|
$1,000 a month
|
|
25
|
$640,829
|
$1,281,657
|
$2,563,315
|
|
35
|
$303,219
|
$606,439
|
$1,212,877
|
|
45
|
$131,596
|
$263,191
|
$526,382
|
|
55
|
$44,351
|
$88,702
|
$177,403
|
Mohammed bin Zayed Majlis
What is the FNC?
The Federal National Council is one of five federal authorities established by the UAE constitution. It held its first session on December 2, 1972, a year to the day after Federation.
It has 40 members, eight of whom are women. The members represent the UAE population through each of the emirates. Abu Dhabi and Dubai have eight members each, Sharjah and Ras al Khaimah six, and Ajman, Fujairah and Umm Al Quwain have four.
They bring Emirati issues to the council for debate and put those concerns to ministers summoned for questioning.
The FNC’s main functions include passing, amending or rejecting federal draft laws, discussing international treaties and agreements, and offering recommendations on general subjects raised during sessions.
Federal draft laws must first pass through the FNC for recommendations when members can amend the laws to suit the needs of citizens. The draft laws are then forwarded to the Cabinet for consideration and approval.
Since 2006, half of the members have been elected by UAE citizens to serve four-year terms and the other half are appointed by the Ruler’s Courts of the seven emirates.
In the 2015 elections, 78 of the 252 candidates were women. Women also represented 48 per cent of all voters and 67 per cent of the voters were under the age of 40.
UAE currency: the story behind the money in your pockets
Yahya Al Ghassani's bio
Date of birth: April 18, 1998
Playing position: Winger
Clubs: 2015-2017 – Al Ahli Dubai; March-June 2018 – Paris FC; August – Al Wahda
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
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