London continues to attract huge investments from abroad, defying the political chaos and Brexit uncertainty, experts have agreed at the London Real Estate Forum (LREF), which opened on Wednesday with a session on the capital's economy and prospects.
'London is still streets ahead of the competition,' said Angus Knowles-Cutler, vice-chairman of Deloitte UK and advisor to the Mayor of London. 'You would need to put its four closest rivals in Europe together to get a city of similar importance.'
The last week has been fraught for the UK, with the prospect of an unstable minority government following the surprise result of the early elections, and more uncertainty over Brexit negotiations due to start next Monday.
Investors, however, seem undeterred by short-term uncertainty and are focusing on the fundamentals, which are positive, Knowles-Cutler said, as London has a fast-expanding and increasingly diverse economy.
'I am still meeting as many investors as I did last year before the EU referendum,' said Fiona Fletcher Smith, executive director at the Greater London Authority (GLA) in charge of development. 'In fact, now I am seeing less time wasters and more serious people. There is a lot of interest in build to rent, and also in development in outer London, which I welcome.'
London remains an 'open city' and City Hall is committed to facilitating investments, she said.
'There is a lot of interest from foreign investors, especially from the US,' agreed Jo Negrini, chief executive of the London Borough of Croydon. In the last few years there has been too much focus on residential, and too much poor quality residential built, she added: 'The positive thing now is that investors are talking about mixed-use developments again. Polycentric London needs offices and retail thrown into the mix.'
Logistics is also showing its strength. Contrary to expectations, despite the housing shortage in London, 'there is no pressure on logistics to flip to residential,' Fletcher Smith said. 'They compete on an even keel in land price terms, and are developing side by side, which is a good thing.'
The most notable trend in London is that the microliving revolution is coming to the British capital. High house prices have frozen most young people out of the market, and more young professionals are forced to rent. Now ‘generation rent’ is looking at the bright side and embracing the new communal life-style.
'Smaller apartments with good communal areas are becoming more popular,' said John Mulryan, managing director of the Ballymore Group. 'Microliving is increasingly seen as a positive thing, and losing its negative shoebox image. Build to rent will play a much bigger role in London in future.'
Over 2,600 delegates are expected to attend LREF, as well as 200 speakers representing the entire development industry, from housebuilder to commercial property developers and from policy makers to institutional investors. The two-day conference is curated by New London Architecture.
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