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London, Overview

Central London, long regarded as the world's hub for financial investments, banking, insurance, legal, consulting and technology; has demonstrated over the decades, the value of keeping and maintaining close proximity to key activities, as well as taking advantage of a high concentration of peers to allow for valuable collaboration and cross pollination of support services and facilities that include; bond markets, stock markets, insurance, foreign exchange and hedge funds; commonly found in the Square Mile, synonymous as the financial district.  

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In line with world class business services, it offers high quality residences to it's 1 million inhabitants, as well as multiple shopping destinations, central offices for UK politics, restaurants for every budget and taste and many cultural venues for the curious and recessive minds. 

 

 

Statistics: 

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  • London GDP: £504bn (25% of UK total)

  • Central London employment: 1.5 million

  • London unemployment rate: 4%

  • Central London population: 1.6 million; (12,475 per sq km)

  • Population growth: Central London; 14% over 10 years (UK average 6%)

  • Business: 1 million in London (1460 businesses per every 10,000 persons). 

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Districts

  • Financial: Liverpool St, Bank and St Pauls.

  • Legal: Temple, Chancery Lane, Fleet St

  • Educational: West Central North, Euston, Kings Cross

  • Politics: Whitehall, Westminster

  • Retail: Oxford Circus, Regent Street, Piccadilly, Knightsbridge, Kings St, Kensington High St, Sloane St, New Bond St. 

  • Business: Mayfair, East Central, London Bridge. 

  • Technology: Kings Cross, Battersea

 

Credential

The accumulation of businesses into the various specialised districts in central London are the key to it's strength and stability; the opportunity to collaborate or to provide relative support services attracts further businesses in an area , allowing for businesses to learn, delegate projects and fuel innovation as well as new ideas.  The extraction of distance as a result of a high concentration of specialised business within a district adds to the individual businesses survival as they are able to focus resources onto that location and thus, reduce costs. 

 

The Future

Newly developed districts have include Southwark, London Bridge, Battersea; demonstrating a strong and positive trend of the business district's expansion into south of the River Thames, which in previous generation would have shown a clear divide. Aside from short term changes in economic outlook, there is rapid and clear geographic expansion. organisations moving to the south have included Apple (UK HQ) and the US Embassy. 

 

Infrastructure has continued to expand; the mega project: The Elizabeth Line is a new underground rail that has opened in 2022, cutting across central London and connecting to London Heathrow airport. The Chinese Business District is due to open in the next few years, whilst other business districts will also be added around the London City Airport. 

Investing in Central London 
Basic Facts

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  • Stable, predictable returns at around 4% (prime central London offices).

  • A consistent quality in the commercial environment.

  • A long term established community of businesses that stay local when moving to accommodate business changes and real estate requirements.

  • Investors can expect immediate uptake of any vacant stock.

  • Arguably one of the world’s most important cities with some of the best universities in the world, as well as an attraction of elite talent from around the world.

  • New Elizabeth underground line is a reflection of the city’s commitment to building valuable infrastructure and a demonstration of the city’s ability to deliver mega projects. (See also HS2).

  • Excellent global connections; airports include London City, Heathrow, Luton, Stansted, Southend, Biggin Hill and Gatwick (the busiest single runway airport in the world).


Investment Performance
 

Yields (subject to fluctuation)
 

  • Mayfair / St.James: 3.25%

  • Soho: 4.0%

  • Marylebone / Fitzrovia: 4%

  • Victoria: 4%

  • City Core: 4%

  • City (East): 4.25%

  • Paddington: 4.25%

  • Canary Wharf: 4.5%

  • Hammersmith: 4.5%

  • Prime West End: 3.25%

  • Prime City: 4%

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The Scene

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  • The number of deals are at 25% of the peak of 2013.

  • Investment is at 75% of volumes during 2013.

  • The difference between the two activity levels is due to smaller transactions not being as active as 2013 levels. Smaller transactions are substantially lower to 2013 levels where the general sentiment is to hold.

  • 74% of investments are by foreign investors.

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The Update

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Negative economics; such as an increase in inflation and interest rates may yield some reserved responses in the short term  but the city’s credentials will keep interest levels above water as it is still the more stable, secure option for the long term.

 

 

Market Activity

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  • 5 Broadgate, EC2; £1.21 billion (£1,728/Sq Ft).

  • Central St. Giles, WC2; 38,000 sqm; 409,028 Sq Ft; Price: £762.5m; £1862/Sq Ft

  • 52-54 Lime St, EC3; 387,000 Sq Ft; £718m; £1855 / Sq Ft

  • Victoria House WC1, 300,000 Sq Ft; £420m, £1400/Sq Ft.

  • 70 Gracechurch St, EC3V 0XL, 600,000 Sq Ft, £300m, £500/Sq Ft.

Disclaimer

The information displayed here comprise of a location summary, of which Mountesque Ltd makes no warranty as to the accuracy or completeness of the information, which is otherwise a guidance used at the viewers discretion. Whilst the information is periodically maintained by Mountesque; they are subject to market, economic and geographic changes and influences,  as well as individual and collective interpretation and viewpoint. Please contact us for direct assistance on any enquiries and for guidance on our consulting packages. 

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