London will retain its position as the world's leading financial centre despite current market conditions, according to a survey of more than 100 of the leading real estate directors in the UK. The survey was conducted with chief executives, chief financial officers and directors who recently attended a real estate companies forum hosted in London by global law firm DLA Piper. Some 79% of the respondents said the credit squeeze was having a direct impact on their businesses. While 35% of the total felt that the market would stabilise in six months or less, 47% were more pessimistic and said the downturn was likely to last for at least another 12 months or more.
London will retain its position as the world's leading financial centre despite current market conditions, according to a survey of more than 100 of the leading real estate directors in the UK. The survey was conducted with chief executives, chief financial officers and directors who recently attended a real estate companies forum hosted in London by global law firm DLA Piper. Some 79% of the respondents said the credit squeeze was having a direct impact on their businesses. While 35% of the total felt that the market would stabilise in six months or less, 47% were more pessimistic and said the downturn was likely to last for at least another 12 months or more.
Over 70% of those polled believe that real estate investment trusts (REIT) - which have performed badly on the stock market since the tax-friendly vehicle was introduced in the UK at the start of the year - will become an integral and vital part of the investment market. Similarly, 95% said property hedge funds and derivatives are 'here to stay'.
Among the 67% of the respondents already investing outside of the UK, Western Europe was most popular (71%); followed by Asia (49%); the CIS (39%); and Australia and South America tied on 13.6%. About 30% of those not investing outside the UK said they planned to do so in the future.
David Taylor, partner and joint global head of DLA Piper's Real Estate Group, commented: 'Whilst the current debt market conditions are having a direct impact on most real estate companies, these findings are evidence of the industry’s confidence in London remaining the world's financial capital. The number of companies opting to invest outside of the UK is further support for a global real estate market view and in addition there is clear evidence of a steady stream of investment in the domestic market.'