Businesses invest in London property despite Brexit uncertainty
The news broke last week that M&G Prudential have invested an incredible £875m in the development at 40 Leadenhall Street in the City of London. In addition to buying the land, they will be building two office blocks on the site (14 and 34 storeys), providing high quality workspace for the capital’s professionals.
A vote of confidence for London
What’s got me really excited is M&G’s vote of confidence in London. Brexit uncertainty has caused the pound to weaken, while the negotiations seem to be seriously damaging Britain’s credibility on the international stage. Yet M&G have seen through the Brexit chaos, seen that it’s likely to be temporary and – best of all – put their money where their mouth is and made considerable investment in London property.
The effect of the weak pound on the London property market
One of the reasons why big businesses are investing in London is the weak pound. For overseas investors, London property offers excellent value at the moment. This means that London has already attracted significant overseas investment – you might remember that the Cheesegrater, also on Leadenhall Street, sold to Chinese company CC Land in 2017. It stands to reason that when more blue chip companies invest in London, more will follow, in order to be able to compete on an even playing field and be in the centre of the action.
The London property market – a safe investment
In spite of the weak pound, the London property market is still seen as a relatively safe investment offering a good return – recent figures suggested that people investing in the London property market were seeing a return of roughly 4.2%. Again, this means that investors from both the UK and abroad are continuing to buy up London property, which is likely to help it continue to grow in the future.
Buy London property before Brexit day
We don’t know what will happen to the pound after Britain leaves the European Union on 31 October 2019 but we do know that until that time, the pound will be a relatively weak currency. Many of my Hong Kong contacts have been in touch because they’ve identified that London is both an affordable investment and a relatively secure one, whatever the Brexit outcome proves to be.
To find out more about investing in property in East London, please get in touch with me, Adam Dockley, on 020 3633 4440.
PS – here’s my Instagram video on why now is a good time for overseas investors to buy London property….
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