A Business Opportunity

    Stephen Down, Executive Director Savills Central London Markets reveals the key future trends

    Savills is at the heart of London property. Every day we talk to investors, developers and tenants, giving us a unique insight into the current state of the market.

    We continue to see a wealth of activity in central London. Residential markets in many areas have risen well ahead of their 2007 values. In the commercial sector there is a tight supply of office space in both the City and the West End, and we still have occupier demand. As a result, rental growth over the past 18 months has been significantly ahead of many competitor markets. What’s more, retailer demand for London’s best shopping streets is stronger than ever.

    There is no question that the resilience of the market is due to international investor and occupier interest. We have a high proportion of overseas money contributing to total investment turnover. Alongside this influx of investment, London has seen the arrival of more international tenants keen to expand into London occupier markets.

    So what about the future? Savills commissioned a major piece of research from Oxford Economics looking at how the capital is set to perform in the aftermath of the global banking crisis and subsequent recession. Te research identified a “virtuous circle” at the heart of London’s business and property life. This refers to the capital’s ability to attract new business, which in turn attracts new labour and skills. It’s a wealth-creating process that is supported by sensible regulatory and tax regimes, free and open markets, as well as a location that allows for easy communication across time zones.

    After weighing up all the factors, Oxford Economics forecasted that London would recover more quickly from the financial crisis than any other global centre.

    Of course, uncertainties remain. There are question marks over how the Government will react to pressure for tighter regulatory control over the financial sector, not to mention the longer-term impact of the financial crisis that is rumbling across Europe. But London has a rich history of reinventing itself and grasping new opportunities. We have already seen growth in the capital’s key property sectors and fully expect that growth to gather pace in the future.


    Key contacts

    Stephen Down

    Stephen Down

    Head of
    Central London and International

    Savills Margaret Street

    +44 (0) 20 7409 8001

    +44 (0) 20 7409 8001