More and more Japanese investors are eying London. Just don’t expect them to act quickly.
At MIPIM Japan this week chatter around investment opportunities in London ranked second only to talk of schemes in and around Tokyo.
The 2020 Olympics is fuelling interest, with the city’s increasing attractiveness to real estate investors demonstrable. Indeed, this month’s CBRE investor intentions report ranked Tokyo second only to London in the league table of leading investible cities.
But talk of a wave of Japanese investment in London, while inevitable, appears premature. Private investors are looking for opportunities, as are institutional investors. Even the government pension fund is considering increasing exposure to non-domestic property. However, the resounding message among the 2,500, mainly Japanese, delegates is that few further significant steps will be taken just yet.
Of course, the likes of Mitsui Fudosan have been active in London for years. But for other major developers the memories of shirts lost in the 1980s are still very much alive. And for some, like Mori Building Company, there are simply too many opportunities at home to consider those abroad.
“If you work for DTZ or Cushman & Wakefield, you might want to dust off your résumé,” the Washington Business Journal said this week. “Or just wait for the calls from headhunters to come in.” It’s not just a Washington phenomenon, of course. One London agency boss told me this week he had already secured his first hires from the newly merged business. Another rubbed his hands and smiled when asked what the merger meant for his business. Meanwhile, Savills is continuing its shopping spree, this week buying specialist London commercial property management business Collier & Madge. This merry-go-round just keeps turning.
CBI president Sir Mike Rake urged businesses to speak up for EU membership this week. JLL’s Guy Grainger, a committed CBI supporter, was among the first to do so. “At a time when the world relies on being globally connected, remaining within the European Union is best for UK business, which is in the national interest,” he said. “It is absolutely the responsibility of businesses to engage in the reform debate to see if further uncertainty can be avoided.”
Earlier this month, responding to the REview, our monthly reader poll, you told us that uncertainty in the run up to a referendum on continued EU membership was a clear and present danger. It is the responsibility of the prime minister to deliver that referendum sooner rather than later. It is the responsibility of the property industry – and other businesses – to speak up and ensure we don’t sleepwalk into an outcome we may come to regret.
It took a while, but the ministerial team at CLG is now in place. And, unusually, there is plenty to be cheered by.
There is continuity in Brandon Lewis, who keeps the housing and planning brief. There is a real commitment to devolution and rebalancing the economy in making James Wharton minister for local growth and the northern powerhouse.
And in Greg Clark as communities secretary there is now a Cabinet minister with a track record of equipping cities with the tools they need to grow. Last week, Clark also asked Lord Heseltine to support him as he took on his new responsibilities. The team means business. Let’s hope they deliver.
It’s not all about Japan. Estates Gazette will again be supporting the UK’s biggest property show, MIPIM UK, when it returns to London Olympia in October. Changes this year include a London Showcase zone highlighting the best of the capital’s property. Some 4,500 delegates are expected, with more than 200 speakers addressing topics ranging from investment to the impact of the digital revolution.
