Consulco has successfully hosted the UK Economy and Real Estate Outlook event, along with four leading organization that have provided insights on the pressures the UK is facing today and their impact on key property markets.
Consulco co-presented the event along with three top London research organisations, namely:
- MSCI, a leading provider of critical decision support tools and services for the global investment community
- Oxford Economics, a leader in global forecasting and quantitative analysis servicing international corporations, financial institutions and government organisations.
- Costar Group, the world leader in real estate information, providing data and forecasts to thousands of property professionals in the UK, the US, Canada and Europe.
The aforementioned speakers provided their analysis about the London economy and the impact of Covid-19 and Brexit on the real estate sector. Following these presentations, the audience had the opportunity to receive feedback from Consulco’s London team on the risks and opportunities presented by the current situation.
The first speaker, Mr. Pushkar Shah, Vice President of the UK Consultant team in MSCI Real Estate has reviewed the performance of the UK property market, with a closer look at London. It was argued that recovery from Covid-19 and Brexit, is on its way, showing large increase in trading volumes in Q4 2021, back to 2017 levels. This quarter has also provided the highest 12-month real estate total return in over a decade of 16.5%. In addition, Mr. Pushkar also showed the UK most prominent investment hubs and analysed on why Central London is the most liquid area in the UK, followed by Outer and Inner London. MSCI statistics also show that Real Estate remains the best performing asset over long term, higher than equities and bonds over a 5- & 10-year period.
Mr. Richard Holt, the Director of Global Cities Research for Oxford Economics, has provided insights and forecasts of the UK Economy, London and the Oxford to Cambridge Arc. His findings show that the UK activity has recovered from its Omicron fall, mostly due to vaccination and removal of social distancing measures. Mr. Richard also forecasted a GDP growth of 3.7% in 2022 and 2.1% in 2023.
The Oxford to Cambridge Arc, the innovative life sciences and R&D area, has provided 41,000 jobs in 2020, with its employment being equal to London & Berkshire combined. Just under £1 billion of investment volume was recorded in the Oxford to Cambridge Arc in 2021 alone. While investors and institution are investing in the Arc, the government is in parallel focusing to strengthen the area by providing housing and improving the transport infrastructure.
Mr. Mark Stansfield, the Head of UK Analytics at CoStar Group, has revealed Real Estate commercial trends happening in London. Following the removal of all social restriction in the UK, office take-up rose sharply in the second half of 2021, showing signs of recovery. In addition, London office investments jumped to a two-year high in Q4 2021, with investors paying enduringly low yields for Prime well let offices. Google mobility statistics show improvements in London high streets the recent weeks, with retail demand bouncing back the recent months. Retail take-up saw a 5-year high, despite Omicron, as large retailers have re-entered the market. In addition, the rise in leasing has reduced the retail availability, indicating strong demand for retail property in London.
Finally, Mr. David King, the Director of Consulco Real Estate discussed about the future of the UK Economy and Real Estate. Mr. King has argued that working from home is coming to an end, tourists are starting to visit London again, consumers spending is increasing, and the economy is growing. In addition, Mr. King has showed with examples that prime property values remain buoyant in Central London with a few key examples from Consulco’s pipeline of property projects. The Investment themes that are in focus are the three R’s. Recovery which we will be investing in areas that have been mostly affected by Covid, Regeneration which includes areas that government will be spending on infrastructure improvements and finally Research, by investing in the Oxford to Cambridge Arc.