International, and especially Asian investment into London should not be taken for granted. It creates wealth, jobs and vibrancy in the capital that could all be snatched away if we don’t maintain an attractive financial climate.
That was the message from a selection of UK property professionals assembled at MIPIM today (Thursday 14 March) to debate whether London had become the foremost target for Asian investors.
“We don’t want to kill the golden goose,” warned Gary Yardley, investment director at Capital and Counties, “London is a driver for the UK and we’ve got to understand why investors – be they Asian or from elsewhere – come to London, and not put barriers in their way to ensure we stay at the forefront of their minds.”
Mark Ridley, chairman and chief executive of Savills, said Asian investors favoured London new-builds, with 44% in central London bought with Asian money last year.
Investors from the Asia Pacific region acquired 24% of the City market last year and about 19% overall if you include the West End.
“There’s a major dynamic here,” Ridley said, “and London’s getting most of the cross-border investment. Paris is only getting a third of the volumes we’re getting in London so we’re looking very strong.”
Other speakers on the panel included Howard Dawber, Canary Wharf Group strategic adviser; Residential Land chief executive and founder Bruce Ritchie; Capital & Counties director Gary Yardley and Berkeley Group’s Tony Pidgley CBE.
However, Dawber rejected the claim that London is the “capital of Asia”, urging authorities to take a more calculated approach.
“We’re top of the shopping list but we’re certainly not governing Asia in any way. You’ve only got to go to Beijing, Shanghai, Singapore or Hong Kong to realise that the idea of London leading there is unrealistic.
“London will be at 20m people by 2031, up from 9m now. If we consider some of the cities in the Far East have populations of 40m-45m, we’re going to have think more strategically about the opportunities to network with other emerging cities and be at the heart of that network.”
Yardley said it was important to balance domestic and international investment streams.
“The UK market it’s still very much there. All the flats we recently sold in Covent Garden we thought were going to sell to Asian buyers, but were sold to the UK.
On under-occupation, Pidgley added: “You think Asian people buy property for it to sit there empty? Not from where we sit, they want it rented just as quickly as the rest of us do. They want the yields, they are as big an owner of rental property in our city than anybody and we may not like that, but it’s good.”
Finally, Dawber predicted increasing capital from developing countries, including Columbia, Vietnam and Brazil.
EG editor Damian Wild chaired the debates, which were sponsored by Savills.
Visit our MIPIM home page to listen to the debates.
Rebecca.Kent@estatesgazette.com
