London

London's position on the global property market




Between January and March this year, almost £5bn worth of central London commercial property transactions took place, according to CBRE. This marked the biggest quarterly total since late 2014.

Despite a year of Brexit unease and a shock, snap election and the even more unexpected result of a hung parliament, London commercial property remains a central focus for investment.

London’s commercial property accounts for 38% of the total UK industry value, up from 26% in 2004, according to the PIA Property Data Report 2016.

This is testament to London’s resilience, appeal and ability to adapt in the face of adversity.

In particular, we have seen an upward trend in foreign investment into the capital’s commercial sector, which shows no sign of abating.

Overseas investors have shrugged off post-Brexit and political uncertainty to take advantage of the favourable exchange rates and the momentary drop in the pound’s value.

According to figures from Savills, foreign investment last year accounted for a record 80% of the transaction volume of London commercial property, with investors from Asia the most active group.

Fears of steep price drops following Brexit were also in part placated by the sale in March of London’s Leadenhall Building (aka ‘the Cheesegrater’), which was bought for £1.15bn by Chinese investors.

There has even been a spark of interest from investors from new areas of the globe, including Taiwan, after the Taiwanese financial regulator lifted restrictions on external monetary investment.

According to our own lending behaviour post-referendum, appetite for commercial real estate among UK investors has not ceased either. Transactions from clients across the UK, for instance, have continued in abundance since the general election was announced.

Moreover, there has been a rise in demand for short-term bridging finance to cover the void left by traditional debt lenders, many of whom have restricted or paused lending facilities all together.

With this in mind, it is essential that investors explore alternative lending options if the London commercial property market is to continue to thrive.

At Reditum Capital, for instance, we lend up to 80% for assets on a 180-day valuation,

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