EDITOR’S COMMENT: Blackstone became the latest landlord to consider pulling the sale of a significant building in London.
Make no mistake, it’s no one-off: sellers are having to shift expectations as the market softens.
Blackstone’s quandary concerns Cushman & Wakefield’s £330m City office at 125 Old Broad Street, EC2. But Knight Frank has identified nine properties with a combined asking price of £3.6bn being withdrawn from the City market at the end of Q4.
The market is shifting fast. Hong Kong investors alone accounted for 40% of the London real estate market last year, though this figure was boosted by the sale of the Cheesegrater and Walkie Talkie, two true trophy assets.
The Chinese government extension of capital controls has reduced the ability of some investors to look overseas, but it is the recovery in the value of the pound that has hit demand for London real estate hardest.
So what’s the answer? For some it will be to pursue off-market deals – indeed three of the nine sales withdrawn have been revived this way. For others, asset management and a potential refinancing will be necessary. Some, if they have to, will cut prices
Real estate has had a welcome habit of surprising on the upside in the past couple of years. But it can do so only when it is accompanied by realism – on price and on just how much of a trophy an asset really represents.
■ Neat advice from regular EG tech contributor Antony Slumbers on how to ensure artificial intelligence doesn’t gobble up your job.
1) Do not remain in a repeatable job
2) Learn what AI is good for
3) Become an exponential human
4) Think how AI will change the world
Simple. For more, especially on how to become an exponential human, listen to our TechTalk podcast at estatesgazette.podbean.com.
■ Speaking of auctions – and tech – Allsop is holding its first online commercial auction this month, an eight-lot sale. The auctioneer has already sold new homes online but this date, 26 April, drips with added significance for the wider sector.
That same day, Lambert Smith Hampton is selling online, as is Irish online auction house BidX1, which debuted in the UK last month.
As long as buyers want to be in the ballroom, physical sales will continue to dominate. But there is a direction of travel.
Comparing the demographics of attendees off and online sales over the coming months could reveal how quickly that balance might shift.
■ On 1 May, EG turns 160.
It’s quite a milestone. Nevertheless we prefer looking forward to looking back. And next week sees perhaps our most significant launch since 1858, certainly our most momentous since EGi was born 22 years ago.
Radius Data Exchange goes live on Monday. It does so much more than simply replace EGi.
EG is working together with the UK real estate market to exchange superior data, analytics and news that will help drive smarter real estate investments.
You will see what we mean on Monday, when this powerful data-sharing platform created by the market, for the market, goes live. Until then you can get a flavour at www.egi.co.uk/radiusdx/
To send feedback, e-mail damian.wild@egi.co.uk or tweet @DamianWild or @estatesgazette
