Why London will remain resilient through BrexitMarch 16, 2018
In this current environment with the apparent lack of political decisiveness over what Brexit means for all of us, it is easy to be despondent on where the London economy sits. However, if one looks behind the politics thankfully there is much going on that we should be comforted by.
Last year, £16.4 billion of commercial property was traded in Central London. 81% was from overseas investors involving 24 separate countries. London remained the principal cross border global gateway city for investment ahead of New York, Paris and Sydney. In fact, the volumes in London were greater than those going into these three cities put together.
The occupational markets remained very active and the much-feared over-supply of offices has not materialised. London is also at the forefront of the flexible office revolution which is creating a great environment for businesses to grow. I therefore have three key messages.
Firstly, it needs to be restated as often as possible, London will remain a leading, if not the leading global financial centre. Deutsche Bank’s pre-letting of 50,000 sq ft last year is indicative of why London remains so important.
Secondly, London has become a global tech hub over the last decade. Since the referendum, we have seen 4.1m sq ft of take-up by the tech sector including Google, Apple, Facebook and Amazon. We expect London to consolidate this position. London’s unrivalled talent is a key attraction which is obviously why we are all keenly focused on the immigration policies post Brexit so this can continue.
Thirdly, life sciences, the next Big Bang. Will the Crick Institute act as a catalyst for major growth in the sector in the same way that deregulation did for Financial Services did in the 1980s? We think so. A combination of inflation busting global healthcare spending, shifting sector dynamics, and the big increase in Big Data and personalised treatments plays to London’s strengths.
So therefore, whilst current conditions are challenging, we believe London will remain resilient.
From CBRE Chairman, Stephen Hubbard’s opening speech at the London First MIPIM Lunch